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."Manhattan Bridge Capital Dividend Yield: 7.80% Manhattan Bridge Capital (NASDAQ: LOAN) shares currently have a dividend yield of 7.80%. Manhattan Bridge Capital, Inc. provides short-term, secured, and non banking loans to real estate investors to fund their acquisition and construction of properties in the New York Metropolitan area. The company has a P/E ratio of 15.00. The average volume for Manhattan Bridge Capital has been 58,100 shares per day over the past 30 days. Manhattan Bridge Capital has a market cap of $21.8 million and is part of the financial services industry. Shares are down 10.7% 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 Manhattan Bridge Capital as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 10.0%. Since the same quarter one year prior, revenues rose by 30.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Powered by its strong earnings growth of 60.00% and other important driving factors, this stock has surged by 122.42% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LOAN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- MANHATTAN BRIDGE CAPITAL 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. During the past fiscal year, MANHATTAN BRIDGE CAPITAL INC increased its bottom line by earning $0.15 versus $0.10 in the prior year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Financial Services industry. The net income increased by 121.1% when compared to the same quarter one year prior, rising from $0.19 million to $0.43 million.
- You can view the full Manhattan Bridge Capital Ratings Report.
- The revenue growth came in higher than the industry average of 12.2%. Since the same quarter one year prior, revenues rose by 28.6%. 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.
- The gross profit margin for EDUCATIONAL DEVELOPMENT CORP is rather high; currently it is at 62.37%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 4.80% is above that of the industry average.
- Net operating cash flow has significantly increased by 62.49% to $2.10 million when compared to the same quarter last year. In addition, EDUCATIONAL DEVELOPMENT CORP has also vastly surpassed the industry average cash flow growth rate of -34.48%.
- EDUC's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.81 is somewhat weak and could be cause for future problems.
- Compared to its closing price of one year ago, EDUC's share price has jumped by 50.00%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- You can view the full Educational Development Ratings Report.
- The revenue growth came in higher than the industry average of 0.2%. Since the same quarter one year prior, revenues rose by 21.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 52.2% when compared to the same quarter one year prior, rising from $7.76 million to $11.81 million.
- Net operating cash flow has significantly increased by 143.57% to $28.71 million when compared to the same quarter last year. In addition, THL CREDIT INC has also vastly surpassed the industry average cash flow growth rate of -217.06%.
- The gross profit margin for THL CREDIT INC is rather high; currently it is at 65.14%. Regardless of TCRD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TCRD's net profit margin of 51.02% significantly outperformed against the industry.
- 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 Capital Markets industry and the overall market on the basis of return on equity, THL CREDIT INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- You can view the full THL Credit Ratings Report.
- Our dividend calendar.