Why Chemical Financial (CHFC) Stock Is Rising Today

NEW YORK (TheStreet) -- Shares of Chemical Financial Corp. (CHFC) are higher by 2.35% to $27.86 in mid-morning trading on Wednesday after the company reported an increase in net income for the 2014 second quarter to $16.2 million, or 54 cents per diluted share, compared to $14.2 million, or 51 cents per diluted share, for the same period last year.

The company operates as a financial holding company and offers a variety of traditional banking service through its subsidiary, Chemical Bank.

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

"We rate CHEMICAL FINANCIAL CORP (CHFC) 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 increase in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Commercial Banks industry average. The net income increased by 4.4% when compared to the same quarter one year prior, going from $13.23 million to $13.81 million.
  • Net operating cash flow has significantly increased by 199.39% to $20.82 million when compared to the same quarter last year. In addition, CHEMICAL FINANCIAL CORP has also vastly surpassed the industry average cash flow growth rate of -98.56%.
  • The gross profit margin for CHEMICAL FINANCIAL CORP is currently very high, coming in at 91.89%. 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 20.50% trails the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.1%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • CHEMICAL FINANCIAL CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CHEMICAL FINANCIAL CORP increased its bottom line by earning $2.00 versus $1.85 in the prior year. For the next year, the market is expecting a contraction of 2.5% in earnings ($1.95 versus $2.00).
  • You can view the full analysis from the report here: CHFC Ratings Report
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