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." AllianceBernstein Holding L.P (NYSE: AB) shares currently have a dividend yield of 7.50%. AllianceBernstein Holding L.P. provides investment management and related services in the United States and internationally. The company has a P/E ratio of 15.68. The average volume for AllianceBernstein Holding L.P has been 405,600 shares per day over the past 30 days. AllianceBernstein Holding L.P has a market cap of $2.0 billion and is part of the financial services industry. Shares are up 1.8% year-to-date as of the close of trading on Friday. TheStreet Ratings rates AllianceBernstein Holding L.P as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing. Highlights from the ratings report include:
- AB's very impressive revenue growth greatly exceeded the industry average of 8.8%. Since the same quarter one year prior, revenues leaped by 307.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ALLIANCEBERNSTEIN HOLDING 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ALLIANCEBERNSTEIN HOLDING LP turned its bottom line around by earning $0.50 versus -$0.95 in the prior year. This year, the market expects an improvement in earnings ($1.61 versus $0.50).
- Net operating cash flow has significantly increased by 83.01% to $40.48 million when compared to the same quarter last year. Despite an increase in cash flow of 83.01%, ALLIANCEBERNSTEIN HOLDING LP is still growing at a significantly lower rate than the industry average of 273.60%.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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 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. When compared to other companies in the Capital Markets industry and the overall market, ALLIANCEBERNSTEIN HOLDING LP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full AllianceBernstein Holding L.P Ratings Report.
- Despite its growing revenue, the company underperformed as compared with the industry average of 15.1%. Since the same quarter one year prior, revenues rose by 14.4%. 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.
- FERRELLGAS PARTNERS -LP's earnings per share declined by 40.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FERRELLGAS PARTNERS -LP turned its bottom line around by earning $0.68 versus -$0.14 in the prior year. This year, the market expects an improvement in earnings ($0.88 versus $0.68).
- The gross profit margin for FERRELLGAS PARTNERS -LP is currently extremely low, coming in at 9.44%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -5.98% trails that of the industry average.
- Net operating cash flow has significantly decreased to -$34.41 million or 449.96% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full Ferrellgas Partners 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. To add to this, INTX has a quick ratio of 1.56, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for INTERSECTIONS INC is rather high; currently it is at 64.86%. 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 -1.95% trails the industry average.
- Net operating cash flow has significantly decreased to $5.23 million or 62.36% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- 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. In comparison to the other companies in the Commercial Services & Supplies industry and the overall market, INTERSECTIONS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full Intersections Ratings Report.
- The revenue growth came in higher than the industry average of 5.6%. Since the same quarter one year prior, revenues rose by 19.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MARPS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
- The gross profit margin for MARINE PETROLEUM TRUST is currently very high, coming in at 100.00%. MARPS has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, MARPS's net profit margin of 96.11% significantly outperformed against the industry.
- 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 Oil, Gas & Consumable Fuels industry and the overall market, MARINE PETROLEUM TRUST's return on equity significantly exceeds that of both the industry average and the S&P 500.
- MARPS has underperformed the S&P 500 Index, declining 7.00% from its price level of one year ago. 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.
- You can view the full Marine Petroleum Ratings Report.
- Our dividend calendar.