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." Columbia Property Dividend Yield: 4.70% Columbia Property (NYSE: CXP) shares currently have a dividend yield of 4.70%. Columbia Property Trust, Inc is an equity real estate investment trust. The firm invests in the real estate markets of the United States. It focuses on investing in and managing high-quality commercial office properties. The firm was formerly known as Wells Real Estate Investment Trust II Inc. The company has a P/E ratio of 64.45. The average volume for Columbia Property has been 596,100 shares per day over the past 30 days. Columbia Property has a market cap of $3.2 billion and is part of the real estate industry. Shares are up 2.1% 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 Columbia Property as a hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow. Highlights from the ratings report include:
- COLUMBIA PROPERTY TRUST INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, COLUMBIA PROPERTY TRUST INC increased its bottom line by earning $0.21 versus $0.05 in the prior year. This year, the market expects an improvement in earnings ($0.38 versus $0.21).
- 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 420.6% when compared to the same quarter one year prior, rising from $4.80 million to $24.99 million.
- 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. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- The gross profit margin for COLUMBIA PROPERTY TRUST INC is rather low; currently it is at 19.19%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 18.00% trails that of the industry average.
- Net operating cash flow has declined marginally to $58.14 million or 6.28% 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.
- You can view the full Columbia Property Ratings Report.