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) -- Masco Corporation (NYSE: MAS) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, revenue growth, notable return on equity and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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- Powered by its strong earnings growth of 45.45% and other important driving factors, this stock has surged by 51.93% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MAS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- MASCO CORP has improved earnings per share by 45.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MASCO CORP continued to lose money by earning -$0.23 versus -$1.34 in the prior year. This year, the market expects an improvement in earnings ($0.68 versus -$0.23).
- Despite its growing revenue, the company underperformed as compared with the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Building Products industry and the overall market, MASCO CORP's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Building Products industry average, but is greater than that of the S&P 500. The net income increased by 42.4% when compared to the same quarter one year prior, rising from $33.00 million to $47.00 million.
-- Written by a member of TheStreet Ratings Staff