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." America First Multifamily Investors Dividend Yield: 8.70% America First Multifamily Investors (NASDAQ: ATAX) shares currently have a dividend yield of 8.70%. America First Multifamily Investors, L.P. acquires, holds, sells, and deals in a portfolio of mortgage revenue bonds that have been issued to provide construction and/or permanent financing of multifamily residential apartments. The company has a P/E ratio of 22.00. The average volume for America First Multifamily Investors has been 132,900 shares per day over the past 30 days. America First Multifamily Investors has a market cap of $344.6 million and is part of the real estate industry. Shares are down 9.9% 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 America First Multifamily Investors as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and deteriorating net income. Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 60.36% to $4.59 million when compared to the same quarter last year. In addition, AMERICA FIRST MULTIFAMILY-LP has also vastly surpassed the industry average cash flow growth rate of -51.98%.
- The gross profit margin for AMERICA FIRST MULTIFAMILY-LP is currently very high, coming in at 79.83%. Regardless of ATAX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ATAX's net profit margin of 32.50% significantly outperformed against the industry.
- 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 Thrifts & Mortgage Finance industry and the overall market, AMERICA FIRST MULTIFAMILY-LP's return on equity is below that of both the industry average and the S&P 500.
- The share price of AMERICA FIRST MULTIFAMILY-LP has not done very well: it is down 17.93% 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 America First Multifamily Investors Ratings Report.
- The gross profit margin for SOLAR CAPITAL LTD is currently very high, coming in at 70.49%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 45.02% significantly outperformed against the industry average.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Capital Markets industry average. The net income increased by 20.8% when compared to the same quarter one year prior, going from $10.57 million to $12.77 million.
- The revenue fell significantly faster than the industry average of 1.2%. Since the same quarter one year prior, revenues fell by 34.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- SLRC has underperformed the S&P 500 Index, declining 17.91% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- Net operating cash flow has significantly decreased to -$124.12 million or 147.59% when compared to the same quarter last year. Despite a decrease in cash flow SOLAR CAPITAL LTD is still fairing well by exceeding its industry average cash flow growth rate of -193.96%.
- You can view the full Solar Capital Ratings Report.
- The revenue growth came in higher than the industry average of 5.6%. Since the same quarter one year prior, revenues rose by 27.0%. 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 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- 48.05% is the gross profit margin for STONEMOR PARTNERS LP which we consider to be strong. Regardless of STON's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, STON's net profit margin of -4.18% significantly underperformed when compared to the industry average.
- Net operating cash flow has decreased to $16.49 million or 19.23% when compared to the same quarter last year. Despite a decrease in cash flow of 19.23%, STONEMOR PARTNERS LP is still significantly exceeding the industry average of -110.93%.
- 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 Diversified Consumer Services industry. The net income has significantly decreased by 120.2% when compared to the same quarter one year ago, falling from -$1.48 million to -$3.27 million.
- You can view the full Stonemor Partners Ratings Report.
- Our dividend calendar.