Praxair Inc. Stock Buy Recommendation Reiterated (PX)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Praxair (NYSE: PX) has been reiterated by TheStreet Ratings as a buy with a ratings score of A . The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

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Highlights from the ratings report include:
  • PX's revenue growth has slightly outpaced the industry average of 1.1%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • 43.40% is the gross profit margin for PRAXAIR INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.79% is above that of the industry average.
  • Net operating cash flow has increased to $879.00 million or 11.12% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -3.26%.
  • PRAXAIR INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PRAXAIR INC increased its bottom line by earning $5.61 versus $5.45 in the prior year. This year, the market expects an improvement in earnings ($6.03 versus $5.61).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Chemicals industry average. The net income has decreased by 1.4% when compared to the same quarter one year ago, dropping from $420.00 million to $414.00 million.

Praxair, Inc. engages in the production, distribution, and sale atmospheric and process gases, as well as surface coatings in North America, Europe, South America, and Asia. Praxair has a market cap of $32.86 billion and is part of the basic materials sector and chemicals industry. The company has a P/E ratio of 19.9, above the S&P 500 P/E ratio of 17.7. Shares are up 1% year to date as of the close of trading on Wednesday.

You can view the full Praxair Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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