3 Hold-Rated Dividend Stocks: BSBR, MITT, CMRE
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 which could 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 3 stocks with substantial yields, that ultimately, we have rated "Hold."
Banco Santander Brasil SA/Brazil
Dividend Yield: 10.50%
Banco Santander Brasil SA/Brazil
(NYSE:
) shares currently have a dividend yield of 10.50%.
Banco Santander (Brasil) S.A. provides banking products and services in Brazil and internationally. The company offers commercial banking, investment, mortgage, leasing, credit card, and foreign exchange services, as well as various lending and financing services.
The average volume for Banco Santander Brasil SA/Brazil has been 1,371,100 shares per day over the past 30 days. Banco Santander Brasil SA/Brazil has a market cap of $29.2 billion and is part of the banking industry. Shares are down 21.9% year-to-date as of the close of trading on Tuesday.
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TheStreet Ratings rates
Banco Santander Brasil SA/Brazil
as a
. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, BANCO SANTANDER BRASIL -ADR has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- BSBR, with its very weak revenue results, has greatly underperformed against the industry average of 1.2%. Since the same quarter one year prior, revenues plummeted by 81.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income has significantly decreased by 105.7% when compared to the same quarter one year ago, falling from $403.93 million to -$23.18 million.
- Net operating cash flow has significantly decreased to $1,373.12 million or 84.44% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full Banco Santander Brasil SA/Brazil Ratings Report.
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Dividend Yield: 16.80%
(NYSE:
) shares currently have a dividend yield of 16.80%.
AG Mortgage Investment Trust, Inc., a real estate investment trust, focuses on investing, acquiring, and managing a portfolio of mortgage assets, other real estate-related securities, and financial assets. It invests in residential mortgage-backed securities (RMBS), for which a U.S. The company has a P/E ratio of 25.98.
The average volume for AG Mortgage Investment has been 205,000 shares per day over the past 30 days. AG Mortgage Investment has a market cap of $406.0 million and is part of the real estate industry. Shares are down 23.5% year-to-date as of the close of trading on Tuesday.
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TheStreet Ratings rates
AG Mortgage Investment
as a
. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- The gross profit margin for AG MORTGAGE INVESTMENT TRUST is currently very high, coming in at 78.64%. Regardless of MITT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MITT's net profit margin of -0.98% significantly underperformed when compared to the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 101.3% when compared to the same quarter one year ago, falling from $22.39 million to -$0.30 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, AG MORTGAGE INVESTMENT TRUST's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full AG Mortgage Investment Ratings Report.
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Dividend Yield: 8.90%
(NYSE:
) shares currently have a dividend yield of 8.90%.
COSTAMARE INC. owns and charters containerships to liner companies worldwide. The company has a P/E ratio of 8.09.
The average volume for Costamare has been 163,300 shares per day over the past 30 days. Costamare has a market cap of $979.7 million and is part of the transportation industry. Shares are down 28% year-to-date as of the close of trading on Tuesday.
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TheStreet Ratings rates
Costamare
as a
. The company's strengths can be seen in multiple areas, such as its notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- 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 Marine industry and the overall market, COSTAMARE INC's return on equity exceeds that of both the industry average and the S&P 500.
- The gross profit margin for COSTAMARE INC is currently very high, coming in at 72.84%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 28.07% significantly outperformed against the industry average.
- Despite the weak revenue results, CMRE has outperformed against the industry average of 15.4%. Since the same quarter one year prior, revenues slightly dropped by 0.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Looking at the price performance of CMRE's shares over the past 12 months, there is not much good news to report: the stock is down 38.35%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- Currently the debt-to-equity ratio of 1.72 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, CMRE has a quick ratio of 0.55, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- You can view the full Costamare Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.