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."E-House China Holdings Dividend Yield: 5.50% E-House China Holdings (NYSE: EJ) shares currently have a dividend yield of 5.50%. E-House (China) Holdings Limited, through its subsidiaries, operates as a real estate services company primarily in the People's Republic of China. The company has a P/E ratio of 18.24. The average volume for E-House China Holdings has been 1,649,000 shares per day over the past 30 days. E-House China Holdings has a market cap of $977.6 million and is part of the real estate industry. Shares are down 5.1% 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 E-House China Holdings as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and unimpressive growth in net income. Highlights from the ratings report include:
- EJ's revenue growth has slightly outpaced the industry average of 5.5%. Since the same quarter one year prior, revenues rose by 11.8%. 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.
- EJ's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.90, which clearly demonstrates the ability to cover short-term cash needs.
- E-HOUSE CHINA HOLDINGS -ADR has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, E-HOUSE CHINA HOLDINGS -ADR turned its bottom line around by earning $0.36 versus -$0.59 in the prior year. This year, the market expects an improvement in earnings ($0.52 versus $0.36).
- 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 Management & Development industry. The net income has significantly decreased by 73.5% when compared to the same quarter one year ago, falling from $19.23 million to $5.09 million.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 36.08%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 78.57% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, EJ is still more expensive than most of the other companies in its industry.
- You can view the full E-House China Holdings Ratings Report.
- WRE's revenue growth has slightly outpaced the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 11.4%. 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 66.66% and other important driving factors, this stock has surged by 29.83% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although WRE 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.
- WASHINGTON REIT 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, WASHINGTON REIT reported lower earnings of $0.00 versus $0.12 in the prior year. This year, the market expects an increase in earnings to $1.69 from $0.00.
- The gross profit margin for WASHINGTON REIT is currently lower than what is desirable, coming in at 25.47%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.98% significantly trails the industry average.
- Net operating cash flow has decreased to $23.75 million or 22.09% 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 Washington REIT Ratings Report.
- BXMT's very impressive revenue growth greatly exceeded the industry average of 6.8%. Since the same quarter one year prior, revenues leaped by 167.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for BLACKSTONE MORTGAGE TR INC is currently very high, coming in at 82.58%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 43.71% significantly outperformed against the industry average.
- 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. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- BLACKSTONE MORTGAGE TR INC 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, BLACKSTONE MORTGAGE TR INC swung to a loss, reporting -$0.25 versus $73.00 in the prior year. This year, the market expects an improvement in earnings ($1.88 versus -$0.25).
- 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, BLACKSTONE MORTGAGE TR INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Blackstone Mortgage Ratings Report.
- Our dividend calendar.