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) -- Beneficial Mutual Bancorp (Nasdaq: BNCL) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and disappointing return on equity.
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- The gross profit margin for BENEFICIAL MUTUAL BANCORP is currently very high, coming in at 74.60%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, BNCL's net profit margin of 7.15% significantly trails the industry average.
- BENEFICIAL MUTUAL BANCORP's earnings per share declined by 20.0% 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, BENEFICIAL MUTUAL BANCORP increased its bottom line by earning $0.18 versus $0.15 in the prior year. This year, the market expects an improvement in earnings ($0.21 versus $0.18).
- BNCL, with its decline in revenue, underperformed when compared the industry average of 1.4%. Since the same quarter one year prior, revenues slightly dropped by 9.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, BENEFICIAL MUTUAL BANCORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Thrifts & Mortgage Finance industry average. The net income has decreased by 18.5% when compared to the same quarter one year ago, dropping from $3.95 million to $3.21 million.
-- Written by a member of TheStreet Ratings Staff