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 "Hold."Thomson Reuters Corporation (NYSE: TRI) shares currently have a dividend yield of 4.10%. Thomson Reuters Corporation provides intelligent information for businesses and professionals worldwide. It sells electronic content and services to professionals, primarily on a subscription basis. The company has a P/E ratio of 12.68 The average volume for Thomson Reuters Corporation has been 1,090,800 shares per day over the past 30 days Thomson Reuters Corporation has a market cap of $26.3 billion and is part of the media industry Shares are up 9.1% year to date as of the close of trading on Tuesday TheStreet Ratings rates Thomson Reuters Corporation as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins. Highlights from the ratings report include:
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- Net operating cash flow has significantly decreased to $116.00 million or 57.50% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- 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 Media industry. The net income has significantly decreased by 110.5% when compared to the same quarter one year ago, falling from $294.00 million to -$31.00 million.
- You can view the full Thomson Reuters Corporation Ratings Report.
- IEP's very impressive revenue growth greatly exceeded the industry average of 0.7%. Since the same quarter one year prior, revenues leaped by 89.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 273.79% and other important driving factors, this stock has surged by 33.62% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- ICAHN ENTERPRISES LP reported significant earnings per share improvement 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 year. During the past fiscal year, ICAHN ENTERPRISES LP increased its bottom line by earning $8.07 versus $2.14 in the prior year.
- Net operating cash flow has significantly decreased to -$39.00 million or 108.12% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Currently the debt-to-equity ratio of 1.83 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated.
- You can view the full Icahn Ratings Report.
- DCT's revenue growth has slightly outpaced the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 19.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- 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 Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, DCT INDUSTRIAL TRUST INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for DCT INDUSTRIAL TRUST INC is rather low; currently it is at 20.00%. Regardless of DCT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, DCT's net profit margin of 1.73% is significantly lower than the industry average.
- You can view the full DCT Industrial Ratings Report.
- IRM's revenue growth has slightly outpaced the industry average of 9.1%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $106.61 million or 42.36% when compared to the same quarter last year. In addition, IRON MOUNTAIN INC has also vastly surpassed the industry average cash flow growth rate of -21.06%.
- The gross profit margin for IRON MOUNTAIN INC is rather high; currently it is at 57.00%. Regardless of IRM'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 2.59% trails the industry average.
- 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 Commercial Services & Supplies industry. The net income has significantly decreased by 65.0% when compared to the same quarter one year ago, falling from $55.35 million to $19.39 million.
- The debt-to-equity ratio is very high at 3.45 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, IRM maintains a poor quick ratio of 0.99, which illustrates the inability to avoid short-term cash problems.
- You can view the full Iron Mountain Ratings Report.
- Our dividend calendar.