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) -- Healthcare Realty (NYSE: HR) 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, good cash flow from operations, compelling growth in net income 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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- HR's revenue growth has slightly outpaced the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 15.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 293.8% when compared to the same quarter one year prior, rising from -$6.39 million to $12.38 million.
- Net operating cash flow has increased to $48.86 million or 10.72% when compared to the same quarter last year. In addition, HEALTHCARE REALTY TRUST INC has also modestly surpassed the industry average cash flow growth rate of 9.61%.
- HEALTHCARE REALTY TRUST INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HEALTHCARE REALTY TRUST INC swung to a loss, reporting -$0.14 versus $0.01 in the prior year. This year, the market expects an improvement in earnings ($0.34 versus -$0.14).
- The gross profit margin for HEALTHCARE REALTY TRUST INC is currently lower than what is desirable, coming in at 28.95%. Regardless of HR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 13.70% trails the industry average.