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." Blueknight Energy Partners Dividend Yield: 7.10% Blueknight Energy Partners (NASDAQ: BKEP) shares currently have a dividend yield of 7.10%. Blueknight Energy Partners, L.P., together with its subsidiaries, provides integrated terminalling, storage, processing, gathering, and transportation services for companies engaged in the production, distribution, and marketing of crude oil and asphalt products in the United States. The company has a P/E ratio of 10.65. The average volume for Blueknight Energy Partners has been 172,100 shares per day over the past 30 days. Blueknight Energy Partners has a market cap of $247.7 million and is part of the energy industry. Shares are down 11.2% 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 Blueknight Energy Partners as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry average. The net income increased by 6.9% when compared to the same quarter one year prior, going from $10.54 million to $11.27 million.
- 46.80% is the gross profit margin for BLUEKNIGHT ENERGY PRTNRS LP which we consider to be strong. Regardless of BKEP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BKEP's net profit margin of 23.30% significantly outperformed against the industry.
- BKEP, with its decline in revenue, slightly underperformed the industry average of 6.4%. Since the same quarter one year prior, revenues fell by 11.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The share price of BLUEKNIGHT ENERGY PRTNRS LP has not done very well: it is down 15.66% 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.
- BLUEKNIGHT ENERGY PRTNRS LP's earnings per share declined by 31.0% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, BLUEKNIGHT ENERGY PRTNRS LP reported lower earnings of $0.24 versus $0.32 in the prior year. For the next year, the market is expecting a contraction of 47.9% in earnings ($0.13 versus $0.24).
- You can view the full Blueknight Energy Partners Ratings Report.
- The revenue growth came in higher than the industry average of 13.8%. Since the same quarter one year prior, revenues rose by 30.3%. 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 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 Investment Trusts (REITs) industry. The net income has significantly decreased by 46.6% when compared to the same quarter one year ago, falling from $24.12 million to $12.87 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, RESOURCE CAPITAL CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full Resource Capital Ratings Report.
- The revenue growth came in higher than the industry average of 7.5%. Since the same quarter one year prior, revenues rose by 13.8%. 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.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- FERRELLGAS PARTNERS -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. 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, FERRELLGAS PARTNERS -LP reported lower earnings of $0.40 versus $0.68 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $0.40).
- 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 Gas Utilities industry. The net income has significantly decreased by 65.9% when compared to the same quarter one year ago, falling from -$28.80 million to -$47.80 million.
- The gross profit margin for FERRELLGAS PARTNERS -LP is currently extremely low, coming in at 10.23%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -11.97% is significantly below that of the industry average.
- You can view the full Ferrellgas Partners Ratings Report.
- Our dividend calendar.