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"We rate QUESTAR CORP (STR) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, notable return on equity, expanding profit margins 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 analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Gas Utilities industry. The net income increased by 301.0% when compared to the same quarter one year prior, rising from -$19.20 million to $38.60 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.2%. Since the same quarter one year prior, revenues slightly increased by 5.5%. Growth in the company's revenue appears to have helped boost 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. Compared to other companies in the Gas Utilities industry and the overall market, QUESTAR CORP's return on equity exceeds that of both the industry average and the S&P 500.
- The gross profit margin for QUESTAR CORP is currently very high, coming in at 91.32%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.44% significantly outperformed against the industry average.
- QUESTAR CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, QUESTAR CORP reported lower earnings of $0.91 versus $1.19 in the prior year. This year, the market expects an improvement in earnings ($1.29 versus $0.91).
- You can view the full analysis from the report here: STR Ratings Report