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) -- Popular (Nasdaq: BPOP) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that revenues have generally been declining.
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- Powered by its strong earnings growth of 393.33% and other important driving factors, this stock has surged by 34.27% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although BPOP had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- POPULAR INC reported significant earnings per share improvement 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, POPULAR INC increased its bottom line by earning $2.39 versus $1.50 in the prior year. This year, the market expects an improvement in earnings ($2.51 versus $2.39).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, POPULAR INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.4%. Since the same quarter one year prior, revenues slightly dropped by 0.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.