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) -- ING Groep N.V (NYSE: ING) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and weak operating cash flow.
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- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Financial Services industry. The net income increased by 155.0% when compared to the same quarter one year prior, rising from $906.71 million to $2,312.01 million.
- Powered by its strong earnings growth of 88.88% and other important driving factors, this stock has surged by 48.62% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although ING had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- ING GROEP NV reported significant earnings per share improvement 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, ING GROEP NV reported lower earnings of $0.81 versus $0.87 in the prior year. This year, the market expects an improvement in earnings ($1.42 versus $0.81).
- The debt-to-equity ratio is very high at 3.65 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- 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. When compared to other companies in the Diversified Financial Services industry and the overall market, ING GROEP NV's return on equity is below that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff