3 Sell-Rated Dividend Stocks: FCX, BGC, TDW
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
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 "Sell."
Dividend Yield: 6.60%
(NYSE:
) shares currently have a dividend yield of 6.60%.
Freeport-McMoRan Inc., a natural resource company, engages in the acquisition of mineral assets, and oil and natural gas resources. It primarily explores for copper, gold, molybdenum, cobalt, silver, and other metals, as well as oil and gas.
The average volume for Freeport-McMoRan has been 19,306,700 shares per day over the past 30 days. Freeport-McMoRan has a market cap of $19.6 billion and is part of the metals & mining industry. Shares are down 22.4% year-to-date as of the close of trading on Friday.
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TheStreet Ratings rates
Freeport-McMoRan
as a
. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- 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 Metals & Mining industry. The net income has significantly decreased by 503.4% when compared to the same quarter one year ago, falling from $707.00 million to -$2,852.00 million.
- The debt-to-equity ratio of 1.04 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, FCX has a quick ratio of 0.59, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- 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 Metals & Mining industry and the overall market on the basis of return on equity, FREEPORT-MCMORAN INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Net operating cash flow has significantly decreased to $1,118.00 million or 53.33% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, FREEPORT-MCMORAN INC has marginally lower results.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 38.61%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 504.41% compared to 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.
- You can view the full Freeport-McMoRan Ratings Report.
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Dividend Yield: 4.70%
(NYSE:
) shares currently have a dividend yield of 4.70%.
General Cable Corporation designs, develops, manufactures, markets, and distributes copper, aluminum, and fiber optic wire and cable products for the energy, industrial, construction, and specialty and communications markets worldwide.
The average volume for General Cable has been 744,100 shares per day over the past 30 days. General Cable has a market cap of $751.1 million and is part of the industrial industry. Shares are down 1% year-to-date as of the close of trading on Friday.
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TheStreet Ratings rates
General Cable
as a
. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- 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 Electrical Equipment industry. The net income has significantly decreased by 1108.7% when compared to the same quarter one year ago, falling from $13.80 million to -$139.20 million.
- The debt-to-equity ratio is very high at 2.81 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, BGC maintains a poor quick ratio of 0.83, which illustrates the inability to avoid short-term cash problems.
- 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 Electrical Equipment industry and the overall market, GENERAL CABLE CORP/DE's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for GENERAL CABLE CORP/DE is currently extremely low, coming in at 6.64%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.99% is significantly below that of the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 45.71%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1159.25% compared to 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.
- You can view the full General Cable Ratings Report.
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Dividend Yield: 4.10%
(NYSE:
) shares currently have a dividend yield of 4.10%.
Tidewater Inc. provides offshore service vessels and marine support services through the operation of a fleet of marine service vessels to the offshore energy industry worldwide.
The average volume for Tidewater has been 1,111,100 shares per day over the past 30 days. Tidewater has a market cap of $1.2 billion and is part of the energy industry. Shares are down 28% year-to-date as of the close of trading on Friday.
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TheStreet Ratings rates
Tidewater
as a
. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Highlights from the ratings report include:
- 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 Energy Equipment & Services industry. The net income has significantly decreased by 1377.1% when compared to the same quarter one year ago, falling from $12.58 million to -$160.69 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market, TIDEWATER INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 48.20%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1424.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- TIDEWATER INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TIDEWATER INC reported lower earnings of $2.83 versus $3.04 in the prior year. This year, the market expects an improvement in earnings ($3.72 versus $2.83).
- 41.70% is the gross profit margin for TIDEWATER INC which we consider to be strong. Regardless of TDW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TDW's net profit margin of -41.46% significantly underperformed when compared to the industry average.
- You can view the full Tidewater Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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