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 "Buy." Ryman Hospitality Properties (NYSE: RHP) shares currently have a dividend yield of 4.50%. Ryman Hospitality Properties, Inc. owns and operates hotels in the United States. The company has a P/E ratio of 31.43. The average volume for Ryman Hospitality Properties has been 516,600 shares per day over the past 30 days. Ryman Hospitality Properties has a market cap of $2.5 billion and is part of the real estate industry. Shares are up 18% year-to-date as of the close of trading on Tuesday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreet Ratings rates Ryman Hospitality Properties as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, revenue growth, notable return on equity and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 70.9% when compared to the same quarter one year prior, rising from $16.38 million to $27.99 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.1%. Since the same quarter one year prior, revenues slightly increased by 5.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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 Real Estate Investment Trusts (REITs) industry and the overall market, RYMAN HOSPITALITY PPTYS INC's return on equity exceeds that of both the industry average and the S&P 500.
- Powered by its strong earnings growth of 111.11% and other important driving factors, this stock has surged by 39.09% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- RYMAN HOSPITALITY PPTYS INC 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, RYMAN HOSPITALITY PPTYS INC turned its bottom line around by earning $1.77 versus -$0.60 in the prior year. For the next year, the market is expecting a contraction of 13.6% in earnings ($1.53 versus $1.77).
- You can view the full Ryman Hospitality Properties Ratings Report.