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) -- TC Pipelines (Nasdaq: TCP) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, disappointing return on equity and weak operating cash flow.
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- TCP's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 6.64, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for TC PIPELINES LP is currently very high, coming in at 81.25%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 143.75% significantly outperformed against the industry average.
- Despite the stagnant revenue growth, the company outperformed against the industry average of 6.5%. Since the same quarter one year prior, revenues have remained constant. Even though the company's revenue remained stagnant, the earnings per share decreased.
- Net operating cash flow has decreased to $24.00 million or 22.58% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, TC PIPELINES LP has marginally lower results.
- 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TC PIPELINES LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.