Why Macquarie Infrastructure (MIC) Stock Hit a One-Year High Today

NEW YORK (TheStreet) -- Macquarie Infrastructure  (MIC) hit a 52-week high of $68.41 on Tuesday after the company announced it would spend $1.25 billion to acquire the 50% of International-Matex Tank Terminals it does not own.

Macquarie will pay $990 million in cash and $115 million in newly-issued stock. The company will use proceeds of convertible senior notes to be issued, as well as cash on hand, to provide the cash portion of the transaction. Macquarie will also acquire a $250 million revolving credit facility to provide additional liquidity and flexibility.

The company also increased its quarterly dividend by 1.3% to 95 cents a share. The dividend is payable Aug. 14 to shareholders of record Aug. 11.

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The stock was up 10.87% to $67.82 at 12:28 p.m. Nearly 1.5 million shares had changed hands, compared to the average volume of 196,200.

Separately, TheStreet Ratings team rates MACQUARIE INFRASTRUCT CO LLC as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate MACQUARIE INFRASTRUCT CO LLC (MIC) 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, revenue growth, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

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

  • MACQUARIE INFRASTRUCT CO LLC 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, MACQUARIE INFRASTRUCT CO LLC increased its bottom line by earning $0.60 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($1.26 versus $0.60).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Transportation Infrastructure industry. The net income increased by 246.9% when compared to the same quarter one year prior, rising from $5.87 million to $20.37 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.3%. Since the same quarter one year prior, revenues slightly increased by 4.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 75.46% to $59.08 million when compared to the same quarter last year. In addition, MACQUARIE INFRASTRUCT CO LLC has also vastly surpassed the industry average cash flow growth rate of -3.60%.
  • 41.53% is the gross profit margin for MACQUARIE INFRASTRUCT CO LLC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MIC's net profit margin of 7.37% significantly trails the industry average.
  • You can view the full analysis from the report here: MIC Ratings Report

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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.

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