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 "Sell." Brookfield Property Partners Dividend Yield: 4.70% Brookfield Property Partners (NYSE: BPY) shares currently have a dividend yield of 4.70%. Brookfield Property Partners L.P. owns, operates, and invests in commercial properties in North America, Europe, Australia, and Brazil. The company has a P/E ratio of 7.15. The average volume for Brookfield Property Partners has been 590,000 shares per day over the past 30 days. Brookfield Property Partners has a market cap of $5.2 billion and is part of the real estate industry. Shares are up 8.7% year-to-date as of the close of trading on Thursday. 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 Brookfield Property Partners as a sell. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures. Highlights from the ratings report include:
- The debt-to-equity ratio is very high at 4.63 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.45, which clearly demonstrates the inability to cover short-term cash needs.
- When compared to other companies in the Real Estate Management & Development industry and the overall market, BROOKFIELD PROPERTY PRTRS LP's return on equity is below that of both the industry average and the S&P 500.
- 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. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- BROOKFIELD PROPERTY PRTRS LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Management & Development industry. The net income increased by 609.4% when compared to the same quarter one year prior, rising from -$53.00 million to $270.00 million.
- You can view the full Brookfield Property Partners Ratings Report.