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."BioMed Realty Dividend Yield: 4.40% BioMed Realty (NYSE: BMR) shares currently have a dividend yield of 4.40%. BioMed Realty Trust, Inc. operates as a real estate investment trust (REIT) that focuses on providing real estate to the life science industry in the United States. The company has a P/E ratio of 73.38. The average volume for BioMed Realty has been 1,749,900 shares per day over the past 30 days. BioMed Realty has a market cap of $4.6 billion and is part of the real estate industry. Shares are up 9.4% year-to-date as of the close of trading on Friday. 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 BioMed Realty as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall. Highlights from the ratings report include:
- Powered by its strong earnings growth of 300.00% and other important driving factors, this stock has surged by 27.88% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although BMR had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- BIOMED REALTY 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, BIOMED REALTY TRUST INC increased its bottom line by earning $0.20 versus $0.01 in the prior year. This year, the market expects an improvement in earnings ($0.30 versus $0.20).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength 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, BIOMED REALTY TRUST INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for BIOMED REALTY TRUST INC is rather low; currently it is at 21.84%. Regardless of BMR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, BMR's net profit margin of 9.40% is significantly lower than the industry average.
- You can view the full BioMed Realty Ratings Report.
- The revenue growth came in higher than the industry average of 6.6%. Since the same quarter one year prior, revenues rose by 22.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for SHIP FINANCE INTL LTD is rather high; currently it is at 63.24%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 41.58% significantly outperformed against the industry average.
- SHIP FINANCE INTL LTD 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, SHIP FINANCE INTL LTD reported lower earnings of $1.01 versus $2.26 in the prior year. This year, the market expects an improvement in earnings ($1.41 versus $1.01).
- Currently the debt-to-equity ratio of 1.50 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, SFL has a quick ratio of 0.54, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SHIP FINANCE INTL LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full Ship Finance International Ratings Report.
- The revenue growth came in higher than the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 8.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.71, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that PBF's debt-to-equity ratio is low, the quick ratio, which is currently 0.64, displays a potential problem in covering short-term cash needs.
- PBF has underperformed the S&P 500 Index, declining 11.31% 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.
- 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 Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, PBF ENERGY INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full PBF Energy Ratings Report.
- Our dividend calendar.