Mead Johnson Nutrition Company Stock Buy Recommendation Reiterated (MJN)

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) -- Mead Johnson Nutrition Company (NYSE: MJN) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its notable return on equity, revenue growth, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

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Highlights from the ratings report include:
  • Compared to other companies in the Food Products industry and the overall market, MEAD JOHNSON NUTRITION CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • MJN's revenue growth has slightly outpaced the industry average of 1.1%. Since the same quarter one year prior, revenues slightly increased by 7.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MEAD JOHNSON NUTRITION CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MEAD JOHNSON NUTRITION CO increased its bottom line by earning $2.96 versus $2.47 in the prior year. This year, the market expects an improvement in earnings ($3.30 versus $2.96).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 56.8% when compared to the same quarter one year prior, rising from $85.60 million to $134.20 million.
  • The gross profit margin for MEAD JOHNSON NUTRITION CO is rather high; currently it is at 63.10%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.67% is above that of the industry average.

Mead Johnson Nutrition Company manufactures, distributes, and sells infant formulas, children's nutrition, and other nutritional products. Mead Johnson Nutrition has a market cap of $15.67 billion and is part of the consumer goods sector and food & beverage industry. The company has a P/E ratio of 25.1, above the S&P 500 P/E ratio of 17.7. Shares are up 16.6% year to date as of the close of trading on Thursday.

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

--Written by a member of TheStreet Ratings Staff.

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