Whirlpool Corporation Stock Buy Recommendation Reiterated (WHR)

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) -- Whirlpool Corporation (NYSE: WHR) 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 solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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Highlights from the ratings report include:
  • Compared to its closing price of one year ago, WHR's share price has jumped by 69.67%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, WHR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • WHIRLPOOL CORP's earnings per share declined by 42.0% in the most recent quarter compared to the same quarter a year ago. 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, WHIRLPOOL CORP increased its bottom line by earning $5.06 versus $4.96 in the prior year. This year, the market expects an improvement in earnings ($9.63 versus $5.06).
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.49 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Despite the weak revenue results, WHR has outperformed against the industry average of 28.2%. Since the same quarter one year prior, revenues slightly dropped by 2.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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. When compared to other companies in the Household Durables industry and the overall market, WHIRLPOOL CORP's return on equity is below that of both the industry average and the S&P 500.

Whirlpool Corporation engages in the manufacture and marketing of home appliances worldwide. The company's principal products include laundry appliances, refrigerators and freezers, cooking appliances, dishwashers, mixers, and other portable household appliances. Whirlpool has a market cap of $8.8 billion and is part of the consumer goods sector and consumer durables industry. The company has a P/E ratio of 22.00, above the S&P 500 P/E ratio of 18.00. Shares are up 15.1% year to date as of the close of trading on Friday.

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

--Written by a member of TheStreet Ratings Staff.

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