Spectra Energy Corp Stock Buy Recommendation Reiterated (SE)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- Spectra Energy (NYSE: SE) 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 revenue growth, good cash flow from operations, expanding profit margins, increase in stock price during the past year and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 10.7%. Since the same quarter one year prior, revenues slightly increased by 2.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Net operating cash flow has slightly increased to $582.00 million or 6.59% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -25.59%.
  • 43.55% is the gross profit margin for SPECTRA ENERGY CORP which we consider to be strong. Regardless of SE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SE's net profit margin of 21.39% significantly outperformed against the industry.
  • The net income growth from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 2.1% when compared to the same quarter one year prior, going from $333.00 million to $340.00 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

Spectra Energy Corp, through its subsidiaries, owns and operates a portfolio of natural gas-related energy assets in North America. The company's U.S. Spectra Energy has a market cap of $24.0 billion and is part of the basic materials sector and energy industry. Shares are up 32% year to date as of the close of trading on Thursday.

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

--Written by a member of TheStreet Ratings Staff.

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