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."Blueknight Energy Partners Dividend Yield: 7.30% Blueknight Energy Partners (NASDAQ: BKEP) shares currently have a dividend yield of 7.30%. Blueknight Energy Partners, L.P., together with its subsidiaries, provides integrated terminalling, storage, processing, gathering, and transportation services for companies engaged in the production, distribution, and marketing of crude oil and asphalt products in the United States. The company has a P/E ratio of 27.04. The average volume for Blueknight Energy Partners has been 157,300 shares per day over the past 30 days. Blueknight Energy Partners has a market cap of $167.4 million and is part of the energy industry. Shares are down 14.2% 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 Blueknight Energy Partners as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and generally higher debt management risk. Highlights from the ratings report include:
- BKEP's revenue growth has slightly outpaced the industry average of 2.8%. Since the same quarter one year prior, revenues slightly increased by 0.3%. 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 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 Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, BLUEKNIGHT ENERGY PRTNRS LP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- 38.81% is the gross profit margin for BLUEKNIGHT ENERGY PRTNRS LP which we consider to be strong. Regardless of BKEP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BKEP's net profit margin of 7.90% compares favorably to the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 41.3% when compared to the same quarter one year ago, falling from $6.17 million to $3.62 million.
- The debt-to-equity ratio is very high at 6.18 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, BKEP maintains a poor quick ratio of 0.83, which illustrates the inability to avoid short-term cash problems.
- You can view the full Blueknight Energy Partners 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 58.4% when compared to the same quarter one year prior, rising from $3.17 million to $5.02 million.
- The gross profit margin for WHITEHORSE FINANCE INC is rather high; currently it is at 59.65%. Regardless of WHF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WHF's net profit margin of 55.63% significantly outperformed against the industry.
- When compared to other companies in the Capital Markets industry and the overall market, WHITEHORSE FINANCE INC's return on equity is below that of both the industry average and the S&P 500.
- WHF has underperformed the S&P 500 Index, declining 9.51% from its price level of one year ago. 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.
- Net operating cash flow has significantly decreased to -$55.69 million or 465.05% 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 WhiteHorse Finance Ratings Report.
- The revenue growth came in higher than the industry average of 11.4%. Since the same quarter one year prior, revenues rose by 37.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- RESOURCE CAPITAL CORP 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, RESOURCE CAPITAL CORP reported lower earnings of $0.33 versus $0.72 in the prior year. This year, the market expects an improvement in earnings ($0.42 versus $0.33).
- 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, RESOURCE CAPITAL CORP's return on equity is below that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$5.28 million or 122.52% 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 Resource Capital Ratings Report.
- Our dividend calendar.