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."New York Mortgage Dividend Yield: 13.60% New York Mortgage (NASDAQ: NYMT) shares currently have a dividend yield of 13.60%. New York Mortgage Trust, Inc., a real estate investment trust (REIT), is engaged in acquiring, investing in, financing, and managing mortgage-related and financial assets in the United States. The company has a P/E ratio of 6.35. The average volume for New York Mortgage has been 974,500 shares per day over the past 30 days. New York Mortgage has a market cap of $720.0 million and is part of the real estate industry. Shares are up 13.6% 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 New York Mortgage as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins. Highlights from the ratings report include:
- NYMT's very impressive revenue growth greatly exceeded the industry average of 10.6%. Since the same quarter one year prior, revenues leaped by 61.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 78.94% and other important driving factors, this stock has surged by 29.18% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- 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. But, we feel it is poised for EPS growth 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. This year, the market expects an improvement in earnings ($1.13 versus $1.11).
- The gross profit margin for NEW YORK MORTGAGE TRUST INC is currently lower than what is desirable, coming in at 32.23%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, NYMT's net profit margin of 27.50% compares favorably to the industry average.
- Net operating cash flow has significantly decreased to $5.92 million or 63.65% 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 New York Mortgage Ratings Report.
- MITT's very impressive revenue growth greatly exceeded the industry average of 10.6%. Since the same quarter one year prior, revenues leaped by 214.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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 Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, AG MORTGAGE INVESTMENT TRUST has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- AG MORTGAGE INVESTMENT TRUST 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. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AG MORTGAGE INVESTMENT TRUST swung to a loss, reporting -$1.60 versus $7.34 in the prior year. This year, the market expects an improvement in earnings ($2.45 versus -$1.60).
- Net operating cash flow has decreased to $25.56 million or 38.84% 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 AG Mortgage Investment Ratings Report.
- RNO's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that RNO's debt-to-equity ratio is low, the quick ratio, which is currently 0.61, displays a potential problem in covering short-term cash needs.
- RNO, with its decline in revenue, underperformed when compared the industry average of 3.5%. Since the same quarter one year prior, revenues fell by 14.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- In its most recent trading session, RNO has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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 RHINO RESOURCE PARTNERS LP is rather low; currently it is at 17.15%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -12.30% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to $1.82 million or 90.15% 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 Rhino Resource Partners Ratings Report.
- Our dividend calendar.