NEW YORK (TheStreet) -- Shares of Dynergy (DYN) gained 5.1% to close at $20.68 with heavy trading volume on Friday after the electric utility company announced the next phase of its Producing Results Through Innovation by Dynegy Employees (PRIDE) initiative.
The goal of the company's PRIDE initiative is to deliver $250 million in EBITDA and $400 million in balance sheet improvements over the next three years. Dynergy CEO Robert C. Flexon will present will discuss the initiative at the Wolfe Power & Gas Leaders Conference on September 29.
Dynergy said the PRIDE program will have produced more than $280 million in EBITDA and over $958 million in balance sheet savings with minimal investments from 2011 through the end of 2015.
About 4.4 million shares of Dynergy were traded during regular trading hours Friday, above the company's average trading volume of about 2.6 million shares a day.
TheStreet Ratings team rates DYNEGY INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate DYNEGY INC (DYN) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and generally higher debt management risk.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- DYN's very impressive revenue growth greatly exceeded the industry average of 12.8%. Since the same quarter one year prior, revenues leaped by 90.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- DYNEGY INC 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, DYNEGY INC continued to lose money by earning -$2.60 versus -$3.59 in the prior year. This year, the market expects an improvement in earnings ($0.14 versus -$2.60).
- The gross profit margin for DYNEGY INC is rather low; currently it is at 24.65%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, DYN's net profit margin of 39.19% significantly outperformed against the industry.
- The debt-to-equity ratio is very high at 2.15 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, DYN's quick ratio is somewhat strong at 1.22, demonstrating the ability to handle short-term liquidity needs.
- DYN has underperformed the S&P 500 Index, declining 12.28% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- You can view the full analysis from the report here: DYN