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." Alto Palermo Dividend Yield: 8.70% Alto Palermo (NASDAQ: APSA) shares currently have a dividend yield of 8.70%. Alto Palermo S.A. engages in the ownership, acquisition, development, leasing, management, and operation of shopping centers, as well as residential and commercial complexes in Argentina. The company has a P/E ratio of 14.19. The average volume for Alto Palermo has been 900 shares per day over the past 30 days. Alto Palermo has a market cap of $661.6 million and is part of the real estate industry. Shares are down 0.3% 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 Alto Palermo as a hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- The gross profit margin for ALTO PALERMO SA is rather high; currently it is at 62.40%. 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 -1.87% is in-line with the industry average.
- ALTO PALERMO SA 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, ALTO PALERMO SA increased its bottom line by earning $1.45 versus $1.19 in the prior year.
- Net operating cash flow has significantly decreased to $11.09 million or 65.22% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- 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 Real Estate Management & Development industry. The net income has significantly decreased by 104.1% when compared to the same quarter one year ago, falling from $13.99 million to -$0.58 million.
- You can view the full Alto Palermo Ratings Report.
- Despite its growing revenue, the company underperformed as compared with the industry average of 23.1%. 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.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Marine industry average. The net income has decreased by 0.6% when compared to the same quarter one year ago, dropping from $13.12 million to $13.04 million.
- 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.
- UMH's revenue growth has slightly outpaced the industry average of 13.7%. Since the same quarter one year prior, revenues rose by 15.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- Net operating cash flow has slightly increased to $2.11 million or 1.05% when compared to the same quarter last year. In addition, UMH PROPERTIES INC has also modestly surpassed the industry average cash flow growth rate of -7.00%.
- In its most recent trading session, UMH 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- 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, UMH PROPERTIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for UMH PROPERTIES INC is rather low; currently it is at 19.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 7.17% significantly trails the industry average.
- You can view the full UMH Properties Ratings Report.
- Our dividend calendar.