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) -- CNA Financial (NYSE: CNA) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- The revenue growth came in higher than the industry average of 7.7%. Since the same quarter one year prior, revenues rose by 11.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CNA's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 37.18% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CNA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- CNA FINANCIAL CORP has improved earnings per share by 16.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, CNA FINANCIAL CORP increased its bottom line by earning $2.34 versus $2.27 in the prior year. This year, the market expects an improvement in earnings ($3.05 versus $2.34).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Insurance industry average, but is less than that of the S&P 500. The net income increased by 16.9% when compared to the same quarter one year prior, going from $166.00 million to $194.00 million.