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."Triangle Capital Corporation Dividend Yield: 10.40% Triangle Capital Corporation (NYSE: TCAP) shares currently have a dividend yield of 10.40%. Triangle Capital Corporation is a business development company specializing in private equity and mezzanine investments. The company has a P/E ratio of 10.34. The average volume for Triangle Capital Corporation has been 342,500 shares per day over the past 30 days. Triangle Capital Corporation has a market cap of $683.8 million and is part of the financial services industry. Shares are up 3.3% 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 Triangle Capital Corporation as a hold. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity. Highlights from the ratings report include:
- The gross profit margin for TRIANGLE CAPITAL CORP is currently very high, coming in at 83.30%. 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 -35.42% is in-line with the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.8%. Since the same quarter one year prior, revenues slightly dropped by 8.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- TRIANGLE CAPITAL CORP 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, TRIANGLE CAPITAL CORP increased its bottom line by earning $2.94 versus $2.23 in the prior year. For the next year, the market is expecting a contraction of 30.9% in earnings ($2.03 versus $2.94).
- Net operating cash flow has significantly decreased to -$115.04 million or 353.29% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- 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 Capital Markets industry. The net income has significantly decreased by 138.0% when compared to the same quarter one year ago, falling from $23.17 million to -$8.81 million.
- You can view the full Triangle Capital Corporation Ratings Report.
- The revenue growth came in higher than the industry average of 7.2%. Since the same quarter one year prior, revenues rose by 34.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is very high at 3.36 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- 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 Trading Companies & Distributors industry and the overall market, FLY LEASING LTD -ADR'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 Fly Leasing Ratings Report.
- The revenue growth came in higher than the industry average of 11.8%. Since the same quarter one year prior, revenues slightly increased by 8.4%. 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 significantly increased by 412.70% to $32.05 million when compared to the same quarter last year. In addition, MARTIN MIDSTREAM PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -2.03%.
- MARTIN MIDSTREAM PARTNERS LP 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, MARTIN MIDSTREAM PARTNERS LP swung to a loss, reporting -$0.49 versus $1.33 in the prior year. This year, the market expects an improvement in earnings ($0.15 versus -$0.49).
- Currently the debt-to-equity ratio of 1.78 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, MMLP maintains a poor quick ratio of 0.95, which illustrates the inability to avoid short-term cash problems.
- 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, MARTIN MIDSTREAM PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Martin Midstream Partners Ratings Report.
- Our dividend calendar.