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) -- Pembina Pipeline (NYSE: PBA) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and relatively poor performance when compared with the S&P 500 during the past year.
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- PBA's very impressive revenue growth greatly exceeded the industry average of 3.2%. Since the same quarter one year prior, revenues leaped by 170.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 80.8% when compared to the same quarter one year prior, rising from $45.01 million to $81.37 million.
- PEMBINA PIPELINE CORP has improved earnings per share by 7.4% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, PEMBINA PIPELINE CORP reported lower earnings of $0.87 versus $0.99 in the prior year.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PEMBINA PIPELINE CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for PEMBINA PIPELINE CORP is rather low; currently it is at 16.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.42% trails that of the industry average.
-- Written by a member of TheStreet Ratings Staff