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 "Sell." Artisan Partners Asset Management Dividend Yield: 4.30% Artisan Partners Asset Management (NYSE: APAM) shares currently have a dividend yield of 4.30%. Artisan Partners Asset Management Inc. provides investment management services in the United States and internationally. It offers 12 equity investment strategies spanning various market capitalization segments and investing styles. The average volume for Artisan Partners Asset Management has been 395,800 shares per day over the past 30 days. Artisan Partners Asset Management has a market cap of $1.8 billion and is part of the financial services industry. Shares are down 20.9% year-to-date as of the close of trading on Tuesday. 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 Artisan Partners Asset Management as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- 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 Capital Markets industry and the overall market on the basis of return on equity, ARTISAN PARTNERS ASSET MGMT underperformed against that of the industry average and is significantly less than that of the S&P 500.
- APAM has underperformed the S&P 500 Index, declining 18.67% from its price level of one year ago. 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.
- ARTISAN PARTNERS ASSET MGMT reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ARTISAN PARTNERS ASSET MGMT reported poor results of -$2.02 versus $0.00 in the prior year. This year, the market expects an improvement in earnings ($3.18 versus -$2.02).
- 38.55% is the gross profit margin for ARTISAN PARTNERS ASSET MGMT which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, APAM's net profit margin of 9.62% significantly trails the industry average.
- Net operating cash flow has increased to $91.00 million or 27.72% when compared to the same quarter last year. In addition, ARTISAN PARTNERS ASSET MGMT has also vastly surpassed the industry average cash flow growth rate of -184.83%.
- You can view the full Artisan Partners Asset Management Ratings Report.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TALISMAN ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $458.00 million or 28.10% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- TLM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 53.83%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. 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.
- TALISMAN ENERGY INC reported significant earnings per share improvement in the most recent quarter compared to 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, TALISMAN ENERGY INC reported poor results of -$1.21 versus -$0.02 in the prior year.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.4%. Since the same quarter one year prior, revenues slightly dropped by 3.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full Talisman Energy Ratings Report.
- In its most recent trading session, NRZ 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 our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- NEW RESIDENTIAL INV CP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. For the next year, the market is expecting a contraction of 21.4% in earnings ($1.54 versus $1.96).
- 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 100.1% when compared to the same quarter one year prior, rising from $63.15 million to $126.37 million.
- The gross profit margin for NEW RESIDENTIAL INV CP is currently very high, coming in at 87.96%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 57.53% significantly outperformed against the industry average.
- You can view the full New Residential Investment Ratings Report.
- Our dividend calendar.