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) -- National Western Life Insurance (Nasdaq: NWLI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
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- The revenue growth greatly exceeded the industry average of 8.0%. Since the same quarter one year prior, revenues rose by 43.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NWLI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Insurance industry and the overall market, NATIONAL WESTERN LIFE's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for NATIONAL WESTERN LIFE is rather low; currently it is at 22.25%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, NWLI's net profit margin of 14.76% compares favorably to the industry average.