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."BioMed Realty Dividend Yield: 4.60% BioMed Realty (NYSE: BMR) shares currently have a dividend yield of 4.60%. BioMed Realty Trust, Inc. operates as a real estate investment trust (REIT) that focuses on providing real estate to the life science industry in the United States. The company has a P/E ratio of 83.42. The average volume for BioMed Realty has been 1,614,800 shares per day over the past 30 days. BioMed Realty has a market cap of $4.2 billion and is part of the real estate industry. Shares are up 19.7% year-to-date as of the close of trading on Monday. 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 BioMed Realty as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, impressive record of earnings per share growth, increase in net income, revenue growth and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- BIOMED REALTY TRUST INC has improved earnings per share by 25.0% in the most recent quarter compared to the same quarter a year ago. 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, BIOMED REALTY TRUST INC increased its bottom line by earning $0.20 versus $0.01 in the prior year. This year, the market expects an improvement in earnings ($0.29 versus $0.20).
- 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 25.9% when compared to the same quarter one year prior, rising from $14.81 million to $18.64 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 12.2%. Since the same quarter one year prior, revenues slightly increased by 7.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- You can view the full BioMed Realty Ratings Report.
- Despite its growing revenue, the company underperformed as compared with the industry average of 12.2%. Since the same quarter one year prior, revenues slightly increased by 3.7%. 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.
- Net operating cash flow has slightly increased to $81.51 million or 8.71% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.40%.
- HOME PROPERTIES INC's earnings per share declined by 7.1% 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, HOME PROPERTIES INC increased its bottom line by earning $1.65 versus $1.24 in the prior year. This year, the market expects an improvement in earnings ($1.75 versus $1.65).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, HOME PROPERTIES INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Home Properties Ratings Report.
- GENESIS ENERGY -LP's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, GENESIS ENERGY -LP reported lower earnings of $1.00 versus $1.23 in the prior year. This year, the market expects an improvement in earnings ($1.46 versus $1.00).
- GEL, with its decline in revenue, slightly underperformed the industry average of 2.7%. Since the same quarter one year prior, revenues slightly dropped by 5.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for GENESIS ENERGY -LP is currently extremely low, coming in at 6.45%. Regardless of GEL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.08% trails the industry average.
- Net operating cash flow has significantly decreased to -$0.89 million or 101.56% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- In its most recent trading session, GEL 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 decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.
- You can view the full Genesis Energy Ratings Report.
- Our dividend calendar.