Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to perform against a general benchmark of the equities market and interest rates.
While plenty of high-yield opportunities exist, investors must always consider the safety of their dividend and the total return potential of their investment. It is not uncommon for a struggling company to suspend high-yielding dividends and subsequently result in precipitous share price declines.
TheStreet Ratings' stock rating model views dividends favorably, but not so much that other factors are disregarded. Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown as compared to potential profit volatility, i.e. how much one is willing to risk in order to earn profits?; the level of acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings growth; and the financial strength of the underlying company as compared to its stock's valuation as compared to its stock's performance.
These and many more derived observations are then combined, ranked, weighted, and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of selecting stocks. As always, stock ratings should not be treated as gospel — rather, use them as a starting point for your own research.
The following pages contain our analysis of 5 stocks with substantial yields, that ultimately, we have rated "Buy."Regal Entertainment Group (NYSE:RGC) shares currently have a dividend yield of 4.30%. Regal Entertainment Group, through its subsidiaries, operates as a motion picture exhibitor in the United States. The company develops, acquires, and operates multi-screen theatres primarily in mid-sized metropolitan markets and suburban growth areas of larger metropolitan markets. The company has a P/E ratio of 17.71.The average volume for Regal Entertainment Group has been 782,900 shares per day over the past 30 days. Regal Entertainment Group has a market cap of $2.6 billion and is part of the media industry. Shares are up 36.6% year-to-date as of the close of trading on Monday.TheStreet Ratings rates Regal Entertainment Group as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, increase in stock price during the past year, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins.Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 17.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The strong earnings growth this company has enjoyed -- up -- has apparently played a role in driving up its share price by a solid 25.95%. In addition, the rise in the general market has likely contributed to this stock's strong performance during this past year.Regarding the stock's future course, although almost any stock can fall in a broad market decline, RGC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- REGAL ENTERTAINMENT GROUP 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 two years. We feel that this trend should continue. During the past fiscal year, REGAL ENTERTAINMENT GROUP increased its bottom line by earning $0.93 versus $0.27 in the prior year. This year, the market expects an improvement in earnings ($1.13 versus $0.93).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 212.9% when compared to the same quarter one year prior, rising from $24.00 million to $75.10 million.
- Net operating cash flow has significantly increased by 86.11% to -$1.00 million when compared to the same quarter last year. In addition, REGAL ENTERTAINMENT GROUP has also vastly surpassed the industry average cash flow growth rate of 13.43%.
- You can view the full Regal Entertainment Group Ratings Report.
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