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 Dividend Yield: 4.60% Ryman Hospitality Properties (NYSE: RHP) shares currently have a dividend yield of 4.60%. Ryman Hospitality Properties, Inc. owns and operates hotels in the United States. The company has a P/E ratio of 30.97. The average volume for Ryman Hospitality Properties has been 528,700 shares per day over the past 30 days. Ryman Hospitality Properties has a market cap of $2.4 billion and is part of the real estate industry. Shares are up 13.9% 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 Ryman Hospitality Properties as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, notable return on equity, good cash flow from operations and solid stock price performance. 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 11.6%. 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 30.46% 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.
- Net operating cash flow has significantly increased by 63.03% to $61.88 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 18.92%.
- You can view the full Ryman Hospitality Properties Ratings Report.
- PINNACLE WEST CAPITAL CORP reported flat earnings per share in the most recent quarter. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PINNACLE WEST CAPITAL CORP increased its bottom line by earning $3.66 versus $3.50 in the prior year. This year, the market expects an improvement in earnings ($3.69 versus $3.66).
- The debt-to-equity ratio is somewhat low, currently at 0.84, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.21 is very weak and demonstrates a lack of ability to pay short-term obligations.
- 39.64% is the gross profit margin for PINNACLE WEST CAPITAL CORP which we consider to be strong. Regardless of PNW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PNW's net profit margin of 14.61% compares favorably to the industry average.
- PNW, with its decline in revenue, slightly underperformed the industry average of 5.4%. Since the same quarter one year prior, revenues slightly dropped by 1.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full Pinnacle West Capital Ratings Report.
- Compared to its closing price of one year ago, WIN's share price has jumped by 31.19%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- 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. In comparison to other companies in the Diversified Telecommunication Services industry and the overall market on the basis of return on equity, WINDSTREAM HOLDINGS INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
- The gross profit margin for WINDSTREAM HOLDINGS INC is rather high; currently it is at 52.78%. Regardless of WIN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.95% trails the industry average.
- WIN, with its decline in revenue, slightly underperformed the industry average of 1.7%. Since the same quarter one year prior, revenues slightly dropped by 2.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- WINDSTREAM HOLDINGS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WINDSTREAM HOLDINGS INC increased its bottom line by earning $0.39 versus $0.29 in the prior year. For the next year, the market is expecting a contraction of 48.7% in earnings ($0.20 versus $0.39).
- You can view the full Windstream Holdings Ratings Report.
- Our dividend calendar.