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."Valley National Bancorp Dividend Yield: 4.90% Valley National Bancorp (NYSE: VLY) shares currently have a dividend yield of 4.90%. Valley National Bancorp operates as the bank holding company for the Valley National Bank that provides commercial, retail, and trust and investment services. The company operates in four segments: Commercial Lending, Consumer Lending, Investment Management, and Corporate and Other Adjustments. The company has a P/E ratio of 13.92. The average volume for Valley National Bancorp has been 1,908,000 shares per day over the past 30 days. Valley National Bancorp has a market cap of $2.1 billion and is part of the banking industry. Shares are down 3.1% 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 Valley National Bancorp as a hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, feeble growth in the company's earnings per share and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- The gross profit margin for VALLEY NATIONAL BANCORP is currently very high, coming in at 76.19%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 16.33% trails the industry average.
- The net income growth from the same quarter one year ago has exceeded that of the Commercial Banks industry average, but is less than that of the S&P 500. The net income increased by 2.1% when compared to the same quarter one year prior, going from $27.12 million to $27.68 million.
- VLY, with its decline in revenue, slightly underperformed the industry average of 0.1%. Since the same quarter one year prior, revenues slightly dropped by 3.8%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- VALLEY NATIONAL BANCORP reported flat earnings per share in the most recent quarter. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, VALLEY NATIONAL BANCORP reported lower earnings of $0.67 versus $0.74 in the prior year. For the next year, the market is expecting a contraction of 8.9% in earnings ($0.61 versus $0.67).
- 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 Commercial Banks industry and the overall market, VALLEY NATIONAL BANCORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Valley National Bancorp Ratings Report.
- DOC's very impressive revenue growth greatly exceeded the industry average of 13.4%. Since the same quarter one year prior, revenues leaped by 280.3%. 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 33.33% and other important driving factors, this stock has surged by 28.25% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, PHYSICIANS REALTY TR's return on equity significantly trails that of both the industry average and the S&P 500.
- 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 80.5% when compared to the same quarter one year ago, falling from -$1.16 million to -$2.09 million.
- You can view the full Physicians Realty Ratings Report.
- The revenue growth came in higher than the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 24.9%. 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 improved to $40.18 million from having none in the same quarter last year. Since the company had no net operating cash flow for the prior period, we cannot calculate a percent change in order to compare its growth rate with that of its industry average.
- Compared to other companies in the Independent Power Producers & Energy Traders industry and the overall market on the basis of return on equity, PATTERN ENERGY GROUP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The debt-to-equity ratio is very high at 2.06 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, PEGI has managed to keep a strong quick ratio of 2.11, which demonstrates the ability to cover short-term cash needs.
- 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 Independent Power Producers & Energy Traders industry. The net income has significantly decreased by 823.7% when compared to the same quarter one year ago, falling from $1.00 million to -$7.21 million.
- You can view the full Pattern Energy Group Inc Class A Ratings Report.
- Our dividend calendar.