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." PVR Partners (NYSE: PVR) shares currently have a dividend yield of 8.10%. PVR Partners, L.P. gathers and processes natural gas; and manages coal and natural resource properties in the United States. It operates in three segments: Eastern Midstream, Midcontinent Midstream, and Coal and Natural Resource Management. The average volume for PVR Partners has been 480,200 shares per day over the past 30 days. PVR Partners has a market cap of $3.1 billion and is part of the energy industry. Shares are up 1.6% year-to-date as of the close of trading on Wednesday. TheStreet Ratings rates PVR Partners as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and generally higher debt management risk. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 7.8%. Since the same quarter one year prior, revenues slightly increased by 4.8%. 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 significantly increased by 132.42% to $24.33 million when compared to the same quarter last year. In addition, PVR PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -23.37%.
- 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.
- The gross profit margin for PVR PARTNERS LP is currently lower than what is desirable, coming in at 33.11%. Regardless of PVR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PVR's net profit margin of -6.04% significantly underperformed when compared to 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 156.8% when compared to the same quarter one year ago, falling from -$6.87 million to -$17.64 million.
- You can view the full PVR Partners Ratings Report.
- NYMT's very impressive revenue growth greatly exceeded the industry average of 6.9%. Since the same quarter one year prior, revenues leaped by 95.3%. 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 Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, NEW YORK MORTGAGE TRUST INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- NEW YORK MORTGAGE TRUST INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NEW YORK MORTGAGE TRUST INC reported lower earnings of $1.11 versus $1.25 in the prior year. For the next year, the market is expecting a contraction of 15.8% in earnings ($0.94 versus $1.11).
- The gross profit margin for NEW YORK MORTGAGE TRUST INC is currently lower than what is desirable, coming in at 28.56%. Regardless of NYMT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, NYMT's net profit margin of 23.68% compares favorably to the industry average.
- You can view the full New York Mortgage Ratings Report.
- 39.99% is the gross profit margin for COMPANHIA SIDERURGICA NACION which we consider to be strong. 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 -13.88% is in-line with the industry average.
- 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 Metals & Mining industry and the overall market on the basis of return on equity, COMPANHIA SIDERURGICA NACION has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Net operating cash flow has significantly decreased to $299.69 million or 69.19% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly 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 Metals & Mining industry. The net income has significantly decreased by 247.7% when compared to the same quarter one year ago, falling from $165.67 million to -$244.66 million.
- You can view the full Companhia Siderurgica Nacional Ratings Report.
- Our dividend calendar.