What To Sell: 3 Sell-Rated Dividend Stocks OAKS, JMI, STB
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: 13.50%
(NYSE:
) shares currently have a dividend yield of 13.50%.
Five Oaks Investment Corp. focuses on investing, financing, and managing agency and non-agency residential mortgage-backed securities (RMBS), residential mortgage loans, multi-family MBS, and other mortgage-related investments. It would elect to be taxed as a real estate investment trust. The company has a P/E ratio of 4.89.
The average volume for Five Oaks Investment has been 105,800 shares per day over the past 30 days. Five Oaks Investment has a market cap of $163.2 million and is part of the real estate industry. Shares are up 2.7% year-to-date as of the close of trading on Wednesday.
TheStreet Ratings rates
Five Oaks Investment
as a
. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and weak operating cash flow.
Highlights from the ratings report include:
- In its most recent trading session, OAKS has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- Net operating cash flow has declined marginally to $4.93 million or 9.54% when compared to the same quarter last year. Despite a decrease in cash flow FIVE OAKS INVESTMENT CORP is still fairing well by exceeding its industry average cash flow growth rate of -43.90%.
- When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, FIVE OAKS INVESTMENT CORP's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for FIVE OAKS INVESTMENT CORP is rather high; currently it is at 65.49%. Regardless of OAKS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OAKS's net profit margin of 60.89% significantly outperformed against the industry.
- You can view the full Five Oaks Investment Ratings Report.
Dividend Yield: 16.10%
(NYSE:
) shares currently have a dividend yield of 16.10%.
No company description available.
The average volume for JAVELIN Mortgage Investment has been 170,000 shares per day over the past 30 days. JAVELIN Mortgage Investment has a market cap of $107.0 million and is part of the real estate industry. Shares are down 14% year-to-date as of the close of trading on Wednesday.
TheStreet Ratings rates
JAVELIN Mortgage Investment
as a
. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and weak operating cash flow.
Highlights from the ratings report include:
- JMI's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 36.17%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
- Net operating cash flow has decreased to $7.90 million or 30.36% when compared to the same quarter last year. Despite a decrease in cash flow JAVELIN MORTGAGE INVESTMENT is still fairing well by exceeding its industry average cash flow growth rate of -43.90%.
- Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, JAVELIN MORTGAGE INVESTMENT's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for JAVELIN MORTGAGE INVESTMENT is currently very high, coming in at 87.17%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, JMI's net profit margin of 56.68% significantly outperformed against the industry.
- JAVELIN MORTGAGE INVESTMENT reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.52 versus -$1.96).
- You can view the full JAVELIN Mortgage Investment Ratings Report.
Dividend Yield: 7.70%
(NASDAQ:
) shares currently have a dividend yield of 7.70%.
Student Transportation Inc., together with its subsidiaries, provides school bus transportation services in the United States and Canada. It offers contracted, managed, special needs transportation, direct-to-parent, and charter services. The company has a P/E ratio of 191.67.
The average volume for Student Transportation has been 140,800 shares per day over the past 30 days. Student Transportation has a market cap of $480.3 million and is part of the transportation industry. Shares are down 8.3% year-to-date as of the close of trading on Wednesday.
TheStreet Ratings rates
Student Transportation
as a
. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, disappointing return on equity, poor profit margins, weak operating cash flow and feeble growth in its earnings per share.
Highlights from the ratings report include:
- STB has underperformed the S&P 500 Index, declining 7.46% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Road & Rail industry and the overall market, STUDENT TRANSPORTATION INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for STUDENT TRANSPORTATION INC is rather low; currently it is at 24.58%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.24% significantly trails the industry average.
- Net operating cash flow has significantly decreased to $7.53 million or 66.28% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- STUDENT TRANSPORTATION INC reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, STUDENT TRANSPORTATION INC reported lower earnings of $0.02 versus $0.04 in the prior year.
- You can view the full Student Transportation Ratings Report.
Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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