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) -- Energy Company of Parana (NYSE: ELP) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Electric Utilities industry average. The net income increased by 12.4% when compared to the same quarter one year prior, going from $172.55 million to $193.90 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 12.6%. Since the same quarter one year prior, revenues slightly increased by 5.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ELP's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.48, which illustrates the ability to avoid short-term cash problems.
- COPEL-CIA PARANAENSE ENERGIA has improved earnings per share by 11.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, COPEL-CIA PARANAENSE ENERGIA reported lower earnings of $2.67 versus $4.85 in the prior year. For the next year, the market is expecting a contraction of 25.8% in earnings ($1.98 versus $2.67).
-- Written by a member of TheStreet Ratings Staff