3 Stocks Reiterated As A Buy: VZ, QCOM, PEP

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) -- TheStreet Ratings team reiterated 3 stocks with a buy rating on Monday based on 32 different data factors including general market action, fundamental analysis and technical indicators. The in-depth analysis of these ratings decisions goes as follows:

Verizon Communications Inc:

Verizon Communications (NYSE: VZ) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, compelling growth in net income and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

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Highlights from the ratings report include:
  • VZ's revenue growth has slightly outpaced the industry average of 2.7%. Since the same quarter one year prior, revenues slightly increased by 4.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, VERIZON COMMUNICATIONS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 63.69%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.80% is above that of the industry average.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 102.2% when compared to the same quarter one year prior, rising from $1,952.00 million to $3,947.00 million.
  • VERIZON COMMUNICATIONS 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, VERIZON COMMUNICATIONS INC increased its bottom line by earning $4.00 versus $0.31 in the prior year. For the next year, the market is expecting a contraction of 11.8% in earnings ($3.53 versus $4.00).

Verizon Communications Inc., through its subsidiaries, provides communications, information and entertainment products and services to consumers, businesses, and governmental agencies worldwide. Verizon has a market cap of $191.6 billion and is part of the technology sector and telecommunications industry. The company has a P/E ratio of 12.00, below the S&P 500 P/E ratio of 18.00. Shares are down 6.5% year-to-date as of the close of trading on Friday.

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Qualcomm Inc:

Qualcomm (Nasdaq: QCOM) has been reiterated by TheStreet Ratings as a buy with a ratings score of A. According to TheStreet Ratings team: 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, notable return on equity, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from the ratings report include:
  • QCOM's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 4.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • QCOM's debt-to-equity ratio is very low at 0.00 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 3.19, which clearly demonstrates the ability to cover short-term cash needs.
  • 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. Compared to other companies in the Communications Equipment industry and the overall market, QUALCOMM INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • QUALCOMM INC has improved earnings per share by 7.5% 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. During the past fiscal year, QUALCOMM INC increased its bottom line by earning $3.91 versus $3.06 in the prior year. This year, the market expects an improvement in earnings ($5.18 versus $3.91).

QUALCOMM Incorporated designs, develops, manufactures, and markets digital communications products and services based on code division multiple access (CDMA), orthogonal frequency division multiple access (OFDMA), and other technologies. Qualcomm has a market cap of $131.4 billion and is part of the technology sector and telecommunications industry. The company has a P/E ratio of 21.00, above the S&P 500 P/E ratio of 18.00. Shares are up 4.5% year-to-date as of the close of trading on Friday.

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PepsiCo Inc:

PepsiCo (NYSE: PEP) has been reiterated by TheStreet Ratings as a buy with a ratings score of A-. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, notable return on equity, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

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Highlights from the ratings report include:
  • PEPSICO INC has improved earnings per share by 14.5% 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. During the past fiscal year, PEPSICO INC increased its bottom line by earning $4.32 versus $3.92 in the prior year. This year, the market expects an improvement in earnings ($4.54 versus $4.32).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 2.7%. Since the same quarter one year prior, revenues slightly increased by 0.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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 Beverages industry and the overall market, PEPSICO INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for PEPSICO INC is rather high; currently it is at 58.52%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.63% trails the industry average.
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Beverages industry average. The net income increased by 13.1% when compared to the same quarter one year prior, going from $1,075.00 million to $1,216.00 million.

PepsiCo, Inc. operates as a food and beverage company worldwide. Its Frito-Lay North America segment offers Lay's and Ruffles potato chips, Doritos and Tostitos tortilla chips, Cheetos cheese flavored snacks, dips, Fritos corn chips, and Santitas tortilla chips. PepsiCo has a market cap of $129.7 billion and is part of the consumer goods sector and food & beverage industry. The company has a P/E ratio of 19.00, above the S&P 500 P/E ratio of 18.00. Shares are up 2.8% year-to-date as of the close of trading on Friday.

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