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 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."
Dividend Yield: 9.60%
) shares currently have a dividend yield of 9.60%.
StoneMor Partners L.P., together with its subsidiaries, owns and operates cemeteries in the United States. It operates through Cemetery Operations-Southeast, Cemetery Operations-Northeast, Cemetery Operations-West, and Funeral Homes segments.
The average volume for Stonemor Partners has been 173,400 shares per day over the past 30 days. Stonemor Partners has a market cap of $738.5 million and is part of the diversified services industry. Shares are up 0.9% year-to-date as of the close of trading on Tuesday.
TheStreet Ratings rates
. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.
Highlights from the ratings report include:
- STON's revenue growth has slightly outpaced the industry average of 6.6%. Since the same quarter one year prior, revenues rose by 14.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for STONEMOR PARTNERS LP is rather high; currently it is at 51.44%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.16% is in-line with the industry average.
- Net operating cash flow has remained constant at $9.69 million with no significant change when compared to the same quarter last year. In addition, STONEMOR PARTNERS LP has modestly surpassed the industry average cash flow growth rate of -4.30%.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Diversified Consumer Services industry and the overall market, STONEMOR PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
- 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. Regardless of the company's weak debt-to-equity ratio, STON has managed to keep a strong quick ratio of 1.72, which demonstrates the ability to cover short-term cash needs.
- You can view the full Stonemor Partners Ratings Report.
Dividend Yield: 7.10%
) shares currently have a dividend yield of 7.10%.
Keating Capital, Inc. is a business development company specializing in later stage, emerging growth, growth capital, pre-IPO and secondary purchase investments. It seeks to invest in micro-cap and small-cap private companies that are committed to and capable of becoming public. The company has a P/E ratio of 15.72.
The average volume for BDCA Venture has been 16,400 shares per day over the past 30 days. BDCA Venture has a market cap of $55.4 million and is part of the financial services industry. Shares are down 8% year-to-date as of the close of trading on Friday.
Dividend Yield: 11.20%
) shares currently have a dividend yield of 11.20%.
Mid-Con Energy Partners, LP is engaged in the acquisition, exploitation, development, and production of oil and natural gas properties in North America. The company has a P/E ratio of 19.37.
The average volume for Mid-Con Energy Partners has been 103,800 shares per day over the past 30 days. Mid-Con Energy Partners has a market cap of $388.8 million and is part of the energy industry. Shares are down 14% year-to-date as of the close of trading on Tuesday.
TheStreet Ratings rates
Mid-Con Energy Partners
. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.
Highlights from the ratings report include:
- The gross profit margin for MID-CON ENERGY PARTNERS -LP is rather high; currently it is at 58.40%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, MCEP's net profit margin of 19.78% significantly outperformed against the industry.
- MCEP, with its decline in revenue, underperformed when compared the industry average of 3.2%. Since the same quarter one year prior, revenues fell by 14.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, MID-CON ENERGY PARTNERS -LP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- MID-CON ENERGY PARTNERS -LP 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, MID-CON ENERGY PARTNERS -LP reported lower earnings of $1.44 versus $1.63 in the prior year. For the next year, the market is expecting a contraction of 18.8% in earnings ($1.17 versus $1.44).
- 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 63.5% when compared to the same quarter one year ago, falling from $10.54 million to $3.85 million.
- You can view the full Mid-Con Energy Partners Ratings Report.
Other helpful dividend tools from TheStreet:
- Our dividend calendar.