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 "Buy."New York Community Bancorp Dividend Yield: 6.30% New York Community Bancorp (NYSE: NYCB) shares currently have a dividend yield of 6.30%. New York Community Bancorp, Inc. operates as a multi-bank holding company for New York Community Bank and New York Commercial Bank that offer banking products and financial services in New York, New Jersey, Florida, Ohio, and Arizona. The company has a P/E ratio of 14.66. The average volume for New York Community Bancorp has been 2,678,900 shares per day over the past 30 days. New York Community Bancorp has a market cap of $7.0 billion and is part of the banking industry. Shares are down 5.6% year-to-date as of the close of trading on Thursday. 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 New York Community Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. 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 Thrifts & Mortgage Finance industry average. The net income increased by 5.3% when compared to the same quarter one year prior, going from $114.20 million to $120.26 million.
- The gross profit margin for NEW YORK CMNTY BANCORP INC is currently very high, coming in at 71.37%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.67% is above that of the industry average.
- Despite the weak revenue results, NYCB has outperformed against the industry average of 25.1%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- In its most recent trading session, NYCB 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. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- NEW YORK CMNTY BANCORP INC's earnings per share improvement from the most recent quarter was slightly positive. 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, NEW YORK CMNTY BANCORP INC reported lower earnings of $1.08 versus $1.14 in the prior year. For the next year, the market is expecting a contraction of 0.9% in earnings ($1.07 versus $1.08).
- You can view the full New York Community Bancorp 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 43.2%. 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.
- Net operating cash flow has increased to $31.60 million or 19.28% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 4.53%.
- NATIONAL HEALTH INVESTORS' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, NATIONAL HEALTH INVESTORS increased its bottom line by earning $2.76 versus $2.61 in the prior year. This year, the market expects an improvement in earnings ($3.07 versus $2.76).
- The gross profit margin for NATIONAL HEALTH INVESTORS is currently very high, coming in at 73.21%. Regardless of NHI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NHI's net profit margin of 56.84% significantly outperformed against the industry.
- 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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full National Health Investors Ratings Report.
- MAT's debt-to-equity ratio of 0.70 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. Despite the fact that MAT's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.61 is high and demonstrates strong liquidity.
- The gross profit margin for MATTEL INC is rather high; currently it is at 53.21%. Regardless of MAT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MAT's net profit margin of 16.41% compares favorably to the industry average.
- MAT, with its decline in revenue, underperformed when compared the industry average of 4.8%. Since the same quarter one year prior, revenues slightly dropped by 8.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- MATTEL INC's earnings per share declined by 19.8% in the most recent quarter compared to 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, MATTEL INC increased its bottom line by earning $2.60 versus $2.21 in the prior year. For the next year, the market is expecting a contraction of 23.5% in earnings ($1.99 versus $2.60).
- Looking at the price performance of MAT's shares over the past 12 months, there is not much good news to report: the stock is down 31.60%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.
- You can view the full Mattel Ratings Report.
- Our dividend calendar.