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." Navios Maritime Partners L.P Dividend Yield: 10.60% Navios Maritime Partners L.P (NYSE: NMM) shares currently have a dividend yield of 10.60%. Navios Maritime Partners L.P. is engaged in the ownership and operation of dry cargo vessels in Europe, Asia, North America, and Australia. The company has a P/E ratio of 18.70. The average volume for Navios Maritime Partners L.P has been 445,000 shares per day over the past 30 days. Navios Maritime Partners L.P has a market cap of $1.3 billion and is part of the transportation industry. Shares are down 15.5% 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 Navios Maritime Partners L.P as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and deteriorating net income. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 20.8%. Since the same quarter one year prior, revenues rose by 18.7%. 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.
- The gross profit margin for NAVIOS MARITIME PARTNERS LP is currently very high, coming in at 93.07%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.58% significantly outperformed against the industry average.
- NMM's debt-to-equity ratio of 0.72 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 5.40 is very high and demonstrates very strong liquidity.
- Net operating cash flow has decreased to $32.16 million or 21.10% when compared to the same quarter last year. Despite a decrease in cash flow of 21.10%, NAVIOS MARITIME PARTNERS LP is still significantly exceeding the industry average of -93.11%.
- 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 Marine industry and the overall market, NAVIOS MARITIME PARTNERS LP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Navios Maritime Partners L.P Ratings Report.