What To Sell: 3 Sell-Rated Dividend Stocks FSAM, NAO, OHAI
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: 9.90%
(NASDAQ:
) shares currently have a dividend yield of 9.90%.
Fifth Street Asset Management Inc. is an asset management holding company. The firm provides asset management services through its subsidiaries. Fifth Street Asset Management Inc. was founded in 1998 and is headquartered in Greenwich, Connecticut.
The average volume for Fifth Street Asset Management has been 39,900 shares per day over the past 30 days. Fifth Street Asset Management has a market cap of $196.3 million and is part of the financial services industry. Shares are up 26.1% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
Fifth Street Asset Management
as a
. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, 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 Capital Markets industry. The net income has significantly decreased by 195.5% when compared to the same quarter one year ago, falling from $1.30 million to -$1.24 million.
- The gross profit margin for FIFTH STREET ASSET MGMT INC is currently lower than what is desirable, coming in at 32.58%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -6.50% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$15.03 million or 249.97% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 58.59%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 214.28% 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.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 23.7%. Since the same quarter one year prior, revenues fell by 23.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full Fifth Street Asset Management Ratings Report.
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Dividend Yield: 7.20%
(NYSE:
) shares currently have a dividend yield of 7.20%.
Nordic American Offshore Ltd. owns and operates platform supply vessels in the North Sea. It owns and operates eight vessels. The company was founded in 2013 and is based in Hamilton, Bermuda.
The average volume for Nordic American Offshore has been 119,400 shares per day over the past 30 days. Nordic American Offshore has a market cap of $92.8 million and is part of the transportation industry. Shares are down 14% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
Nordic American Offshore
as a
. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- NORDIC AMERICAN OFFSHORE 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, NORDIC AMERICAN OFFSHORE swung to a loss, reporting -$0.46 versus $0.31 in the prior year. For the next year, the market is expecting a contraction of 172.8% in earnings (-$1.26 versus -$0.46).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Energy Equipment & Services industry. The net income has significantly decreased by 117.6% when compared to the same quarter one year ago, falling from -$2.89 million to -$6.29 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 on the basis of return on equity, NORDIC AMERICAN OFFSHORE 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 -$3.28 million or 393.67% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 40.71%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 150.00% 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.
- You can view the full Nordic American Offshore Ratings Report.
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Dividend Yield: 10.00%
(NASDAQ:
) shares currently have a dividend yield of 10.00%.
OHA Investment Corporation is a business development company specializing in investments in small and mid size and middle market private companies.
The average volume for OHA Investment has been 48,600 shares per day over the past 30 days. OHA Investment has a market cap of $48.6 million and is part of the financial services industry. Shares are down 36.6% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
OHA Investment
as a
. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- OHA INVESTMENT CORP 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 two years. During the past fiscal year, OHA INVESTMENT CORP reported poor results of -$1.54 versus -$1.08 in the prior year.
- 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 Capital Markets industry. The net income has significantly decreased by 518.8% when compared to the same quarter one year ago, falling from -$1.89 million to -$11.66 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 Capital Markets industry and the overall market, OHA INVESTMENT CORP'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 60.18%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 544.44% 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.
- The gross profit margin for OHA INVESTMENT CORP is rather high; currently it is at 57.01%. Regardless of OHAI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OHAI's net profit margin of -226.17% significantly underperformed when compared to the industry average.
- You can view the full OHA Investment Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.