Time Warner Cable Inc Stock Buy Recommendation Reiterated (TWC)

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) -- Time Warner Cable (NYSE: TWC) 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 revenue growth, notable return on equity, reasonable valuation levels, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass

Highlights from the ratings report include:
  • TWC's revenue growth has slightly outpaced the industry average of 8.5%. Since the same quarter one year prior, revenues slightly increased by 9.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Media industry and the overall market, TIME WARNER CABLE INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has slightly increased to $1,410.00 million or 4.91% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.13%.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite 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.

Time Warner Cable Inc., together with its subsidiaries, offers video, high-speed data, and voice services to residential and business service customers over its broadband cable systems in the United States. Time Warner Cable has a market cap of $28.18 billion and is part of the services sector and media industry. The company has a P/E ratio of 13.8, below the S&P 500 P/E ratio of 17.7. Shares are down 1.2% year to date as of the close of trading on Tuesday.

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

--Written by a member of TheStreet Ratings Staff.

It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Cramer and Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREE
null

If you liked this article you might like

Discovery and Scripps Surge In Premarket Trading Amid Renewed Deal Talk

Netflix's Biggest Bear Warns the Company Is 'Hemorrhaging Cash' and Stock Could Crash 55%

Twitter Beats First-Quarter Earnings Estimate, Sees Active User Growth Increase

Avoid These 4 'Over-Owned' Stocks

AT&T and Time Warner Executives Head to Capital to Tout Merger