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." Icahn Dividend Yield: 5.80% Icahn (NASDAQ: IEP) shares currently have a dividend yield of 5.80%. Icahn Enterprises L.P., through its subsidiaries, operates in investment, automotive, energy, metals, railcar, gaming, food packaging, real estate, and home fashion businesses in the United States and Internationally. The company has a P/E ratio of 37.30. The average volume for Icahn has been 137,300 shares per day over the past 30 days. Icahn has a market cap of $12.4 billion and is part of the conglomerates industry. Shares are down 5.5% 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 Icahn as a hold. Among the primary strengths of the company is its reasonable valuation levels, considering its current price compared to earnings, book value and other measures. At the same time, however, 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:
- ICAHN ENTERPRISES LP 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 not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ICAHN ENTERPRISES LP increased its bottom line by earning $8.98 versus $3.72 in the prior year.
- The gross profit margin for ICAHN ENTERPRISES LP is currently extremely low, coming in at 8.25%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -8.11% is significantly below that of the industry average.
- The share price of ICAHN ENTERPRISES LP has not done very well: it is down 5.03% 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, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- You can view the full Icahn Ratings Report.
- RPAI's revenue growth has slightly outpaced the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 10.9%. 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 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 28.8% when compared to the same quarter one year prior, rising from -$37.55 million to -$26.74 million.
- RETAIL PPTYS OF AMERICA INC's earnings per share declined by 33.3% 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 year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, RETAIL PPTYS OF AMERICA INC reported poor results of -$0.20 versus -$0.03 in the prior year. This year, the market expects an improvement in earnings ($0.14 versus -$0.20).
- Net operating cash flow has declined marginally to $70.27 million or 8.00% when compared to the same quarter last year. Despite a decrease in cash flow of 8.00%, RETAIL PPTYS OF AMERICA INC is still significantly exceeding the industry average of -64.23%.
- You can view the full Retail Properties of America Inc Class A Ratings Report.
- The gross profit margin for FIRST NIAGARA FINANCIAL GRP is currently very high, coming in at 86.29%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -173.17% is in-line with the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.0%. Since the same quarter one year prior, revenues slightly dropped by 4.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- FIRST NIAGARA FINANCIAL GRP 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, FIRST NIAGARA FINANCIAL GRP increased its bottom line by earning $0.75 versus $0.40 in the prior year. For the next year, the market is expecting a contraction of 286.7% in earnings (-$1.40 versus $0.75).
- 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 Commercial Banks industry. The net income has significantly decreased by 930.4% when compared to the same quarter one year ago, falling from $79.14 million to -$657.23 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Commercial Banks industry and the overall market, FIRST NIAGARA FINANCIAL GRP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full First Niagara Financial Group Ratings Report.
- Our dividend calendar.