Encana Corp Stock Upgraded (ECA)

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) -- Encana (NYSE: ECA) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and expanding profit margins. 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:
  • ECA's very impressive revenue growth greatly exceeded the industry average of 3.1%. Since the same quarter one year prior, revenues leaped by 78.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ENCANA CORP 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. During the past fiscal year, ENCANA CORP turned its bottom line around by earning $0.31 versus -$3.79 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 126.9% when compared to the same quarter one year prior, rising from -$431.00 million to $116.00 million.
  • Net operating cash flow has significantly increased by 178.99% to $943.00 million when compared to the same quarter last year. In addition, ENCANA CORP has also vastly surpassed the industry average cash flow growth rate of 16.76%.
  • The gross profit margin for ENCANA CORP is rather high; currently it is at 55.44%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.13% trails the industry average.

Encana Corporation, together with its subsidiaries, is engaged in exploration for, development, production, and marketing of natural gas, oil, and natural gas liquids in Canada and the United States. Encana has a market cap of $17.03 billion and is part of the basic materials sector and energy industry. Shares are up 26.3% year to date as of the close of trading on Thursday.

You can view the full Encana Ratings Report or get investment ideas from our investment research center.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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