Will This Ratings Call Help OGE Energy Corp (OGE) Stock Today?

NEW YORK (TheStreet) -- OGE Energy Corp (OGE) stock has been re-initiated with an "overweight" rating, Barclays said Wednesday. The firm said the company is well positioned to see considerable EPS growth from electric utility and recently formed Enable Midstream Partners. A $41 price target was set.

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Separately, TheStreet Ratings team rates OGE ENERGY CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate OGE ENERGY CORP (OGE) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • OGE ENERGY 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. We feel that this trend should continue. During the past fiscal year, OGE ENERGY CORP increased its bottom line by earning $1.95 versus $1.80 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.95).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electric Utilities industry. The net income increased by 113.4% when compared to the same quarter one year prior, rising from $23.10 million to $49.30 million.
  • The debt-to-equity ratio is somewhat low, currently at 1.00, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.22 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 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 Electric Utilities industry and the overall market on the basis of return on equity, OGE ENERGY CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The revenue fell significantly faster than the industry average of 9.2%. Since the same quarter one year prior, revenues fell by 37.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
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