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) -- PPL (NYSE: PPL) 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 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 somewhat weak growth in earnings per share.
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- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electric Utilities industry and the overall market, PPL CORP's return on equity exceeds that of both the industry average and the S&P 500.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The revenue fell significantly faster than the industry average of 12.5%. Since the same quarter one year prior, revenues fell by 23.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for PPL CORP is currently lower than what is desirable, coming in at 34.50%. Regardless of PPL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PPL's net profit margin of 11.14% compares favorably to the industry average.
- Net operating cash flow has declined marginally to $622.00 million or 5.90% when compared to the same quarter last year. Despite a decrease in cash flow of 5.90%, PPL CORP is in line with the industry average cash flow growth rate of -15.72%.
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