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." Baytex Energy Dividend Yield: 8.50% Baytex Energy (NYSE: BTE) shares currently have a dividend yield of 8.50%. Baytex Energy Corp., an oil and gas company, is engaged in the acquisition, development, and production of oil and natural gas in the Western Canadian Sedimentary Basin and the United States. The company offers heavy oil, light oil, and natural gas liquids. The company has a P/E ratio of 18.51. The average volume for Baytex Energy has been 450,300 shares per day over the past 30 days. Baytex Energy has a market cap of $5.0 billion and is part of the energy industry. Shares are down 22% 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 Baytex Energy as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and disappointing return on equity. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 30.5%. 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 BAYTEX ENERGY CORP is rather high; currently it is at 66.13%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.10% is above that of the industry average.
- Looking at the price performance of BTE's shares over the past 12 months, there is not much good news to report: the stock is down 26.81%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, BTE is still more expensive than most of the other companies in its industry.
- BAYTEX ENERGY CORP's earnings per share declined by 6.9% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, BAYTEX ENERGY CORP reported lower earnings of $1.32 versus $2.14 in the prior year.
- You can view the full Baytex Energy Ratings Report.
- The revenue growth came in higher than the industry average of 0.4%. Since the same quarter one year prior, revenues rose by 15.2%. 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 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 Food Products industry and the overall market, B&G FOODS INC's return on equity is below that of both the industry average and the S&P 500.
- B&G FOODS 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, B&G FOODS INC reported lower earnings of $0.98 versus $1.21 in the prior year. This year, the market expects an improvement in earnings ($1.57 versus $0.98).
- Net operating cash flow has declined marginally to $24.55 million or 9.80% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, B&G FOODS INC has marginally lower results.
- The share price of B&G FOODS INC has not done very well: it is down 14.93% 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. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full B&G Foods Ratings Report.
- The revenue growth came in higher than the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 21.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry average. The net income increased by 10.5% when compared to the same quarter one year prior, going from $5.51 million to $6.08 million.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- 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, RAMCO-GERSHENSON PROPERTIES's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for RAMCO-GERSHENSON PROPERTIES is currently lower than what is desirable, coming in at 27.09%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 10.98% significantly trails the industry average.
- You can view the full Ramco-Gershenson Properties Ratings Report.
- Our dividend calendar.