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." Navios Maritime Partners L.P Dividend Yield: 8.90% Navios Maritime Partners L.P (NYSE: NMM) shares currently have a dividend yield of 8.90%. Navios Maritime Partners L.P. is engaged in the ownership and operation of dry cargo vessels in Europe, Asia, North America, and Australia. The company has a P/E ratio of 21.64. The average volume for Navios Maritime Partners L.P has been 230,700 shares per day over the past 30 days. Navios Maritime Partners L.P has a market cap of $1.5 billion and is part of the transportation industry. Shares are up 4.2% year-to-date as of the close of trading on Wednesday. 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 Navios Maritime Partners L.P as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, expanding profit margins, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- NMM's revenue growth has slightly outpaced the industry average of 9.5%. Since the same quarter one year prior, revenues rose by 12.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Powered by its strong earnings growth of 27.58% and other important driving factors, this stock has surged by 40.57% 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, NMM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Marine industry. The net income increased by 53.7% when compared to the same quarter one year prior, rising from $19.51 million to $29.99 million.
- The gross profit margin for NAVIOS MARITIME PARTNERS LP is currently very high, coming in at 93.14%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 54.34% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 268.28% to $80.11 million when compared to the same quarter last year. In addition, NAVIOS MARITIME PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -19.22%.
- You can view the full Navios Maritime Partners L.P Ratings Report.
- 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 156.7% when compared to the same quarter one year prior, rising from $12.02 million to $30.87 million.
- Net operating cash flow has significantly increased by 273.87% to $193.65 million when compared to the same quarter last year. In addition, BLACKROCK KELSO CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of -89.11%.
- The gross profit margin for BLACKROCK KELSO CAPITAL CORP is rather high; currently it is at 66.84%. Regardless of BKCC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BKCC's net profit margin of 91.42% significantly outperformed against the industry.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, BLACKROCK KELSO CAPITAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- BLACKROCK KELSO CAPITAL CORP 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, BLACKROCK KELSO CAPITAL CORP increased its bottom line by earning $1.20 versus $0.78 in the prior year. For the next year, the market is expecting a contraction of 29.4% in earnings ($0.85 versus $1.20).
- You can view the full BlackRock Kelso Capital Corporation Ratings Report.
- TNH 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. Along with this, the company maintains a quick ratio of 4.66, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for TERRA NITROGEN CO -LP is rather high; currently it is at 66.09%. Regardless of TNH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TNH's net profit margin of 59.76% significantly outperformed against the industry.
- TNH, with its decline in revenue, underperformed when compared the industry average of 7.7%. Since the same quarter one year prior, revenues fell by 22.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 Chemicals industry and the overall market, TERRA NITROGEN CO -LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 29.27%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 30.39% compared to the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.
- You can view the full Terra Nitrogen Ratings Report.
- Our dividend calendar.