Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. 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 and 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 4 stocks with substantial yields, that ultimately, we have rated "Buy."Triangle Capital Corporation (NYSE: TCAP) shares currently have a dividend yield of 7.50%. Triangle Capital Corporation is a business development company specializing in private equity and mezzanine investments. The company has a P/E ratio of 12.37. The average volume for Triangle Capital Corporation has been 237,600 shares per day over the past 30 days. Triangle Capital Corporation has a market cap of $794.7 million and is part of the financial services industry. Shares are up 12.8% year to date as of the close of trading on Tuesday. TheStreet Ratings rates Triangle Capital Corporation as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 28.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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 Capital Markets industry and the overall market, TRIANGLE CAPITAL CORP's return on equity exceeds that of both the industry average and the S&P 500.
- The gross profit margin for TRIANGLE CAPITAL CORP is currently very high, coming in at 83.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 75.28% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 97.76% to -$0.68 million when compared to the same quarter last year. In addition, TRIANGLE CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of -343.15%.
- Powered by its strong earnings growth of 34.00% and other important driving factors, this stock has surged by 46.26% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TCAP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- You can view the full Triangle Capital Corporation Ratings Report.
- INTX's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.48, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for INTERSECTIONS INC is rather high; currently it is at 66.80%. Regardless of INTX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.69% trails the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.8%. Since the same quarter one year prior, revenues slightly dropped by 9.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- INTERSECTIONS INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, INTERSECTIONS INC increased its bottom line by earning $1.05 versus $0.97 in the prior year.
- You can view the full Intersections Ratings Report.
- The revenue growth greatly exceeded the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 34.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- THL CREDIT INC has improved earnings per share by 17.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, THL CREDIT INC increased its bottom line by earning $1.26 versus $1.19 in the prior year. This year, the market expects an improvement in earnings ($1.39 versus $1.26).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 51.0% when compared to the same quarter one year prior, rising from $5.71 million to $8.61 million.
- The gross profit margin for THL CREDIT INC is rather high; currently it is at 62.40%. Regardless of TCRD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TCRD's net profit margin of 59.72% significantly outperformed against the industry.
- You can view the full THL Credit Ratings Report.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Gas Utilities industry. The net income increased by 59.2% when compared to the same quarter one year prior, rising from $133.89 million to $213.21 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.9%. Since the same quarter one year prior, revenues slightly increased by 1.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 47.80% is the gross profit margin for AMERIGAS PARTNERS -LP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.12% significantly outperformed against the industry average.
- Net operating cash flow has slightly increased to $174.66 million or 5.89% when compared to the same quarter last year. In addition, AMERIGAS PARTNERS -LP has also modestly surpassed the industry average cash flow growth rate of 5.01%.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full AmeriGas Partners Ratings Report.
- Our dividend calendar.