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NEW YORK (TheStreet) -- Suburban Propane Partners (SPH) has been upgraded by TheStreet Ratings from Hold to Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SUBURBAN PROPANE PRTNRS -LP (SPH) 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 revenue growth, good cash flow from operations and notable return on equity. 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 revenue growth came in higher than the industry average of 9.9%. Since the same quarter one year prior, revenues slightly increased by 2.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 87.32% to $124.58 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 60.03%.
- SUBURBAN PROPANE PRTNRS -LP's earnings per share declined by 27.3% 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, SUBURBAN PROPANE PRTNRS -LP increased its bottom line by earning $1.44 versus $0.48 in the prior year. This year, the market expects an improvement in earnings ($1.91 versus $1.44).
- 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. When compared to other companies in the Gas Utilities industry and the overall market, SUBURBAN PROPANE PRTNRS -LP's return on equity is below that of both the industry average and the S&P 500.
- The debt-to-equity ratio of 1.10 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, SPH's quick ratio is somewhat strong at 1.31, demonstrating the ability to handle short-term liquidity needs.
- You can view the full analysis from the report here: SPH Ratings Report