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." Campus Crest Communities Dividend Yield: 8.30% Campus Crest Communities (NYSE: CCG) shares currently have a dividend yield of 8.30%. Campus Crest Communities, Inc., a real estate investment trust (REIT), engages in the ownership, development, building, and management of student housing properties under the Grove brand name in the United States. The average volume for Campus Crest Communities has been 567,100 shares per day over the past 30 days. Campus Crest Communities has a market cap of $518.0 million and is part of the real estate industry. Shares are down 16.4% year-to-date as of the close of trading on Friday. 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 Campus Crest Communities as a hold. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 57.13% to $21.13 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 17.00%.
- CCG, with its decline in revenue, underperformed when compared the industry average of 10.6%. Since the same quarter one year prior, revenues fell by 10.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The share price of CAMPUS CREST COMMUNITIES INC has not done very well: it is down 23.47% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, CAMPUS CREST COMMUNITIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for CAMPUS CREST COMMUNITIES INC is currently extremely low, coming in at 6.52%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.17% is significantly below that of the industry average.
- You can view the full Campus Crest Communities Ratings Report.
- The revenue growth came in higher than the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 10.6%. 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.
- The gross profit margin for SHIP FINANCE INTL LTD is rather high; currently it is at 60.47%. Regardless of SFL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SFL's net profit margin of 30.63% significantly outperformed against the industry.
- SFL's share price has surged by 25.19% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. 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.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SHIP FINANCE INTL LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Net operating cash flow has decreased to $20.02 million or 29.07% 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.
- You can view the full Ship Finance International Ratings Report.
- HCAP's very impressive revenue growth greatly exceeded the industry average of 3.0%. Since the same quarter one year prior, revenues leaped by 70.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- HARVEST CAPITAL CREDIT CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.36 versus $0.47).
- The gross profit margin for HARVEST CAPITAL CREDIT CORP is rather high; currently it is at 57.09%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, HCAP's net profit margin of 68.01% significantly outperformed against the industry.
- HCAP has underperformed the S&P 500 Index, declining 6.21% from its price level of one year ago.
- When compared to other companies in the Capital Markets industry and the overall market, HARVEST CAPITAL CREDIT CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Harvest Capital Credit Ratings Report.
- Our dividend calendar.