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"We rate DOMTAR CORP (UFS) a BUY. This is driven by multiple strengths, 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, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
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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 Paper & Forest Products industry. The net income increased by 940.7% when compared to the same quarter one year prior, rising from $27.00 million to $281.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 2.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Paper & Forest Products industry and the overall market, DOMTAR CORP's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 95.19% to $203.00 million when compared to the same quarter last year. In addition, DOMTAR CORP has also vastly surpassed the industry average cash flow growth rate of 32.30%.
- You can view the full analysis from the report here: UFS Ratings Report