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."Columbia Property Dividend Yield: 4.70% Columbia Property (NYSE: CXP) shares currently have a dividend yield of 4.70%. Columbia Property Trust, Inc is an equity real estate investment trust. The firm invests in the real estate markets of the United States. It focuses on investing in and managing high-quality commercial office properties. The firm was formerly known as Wells Real Estate Investment Trust II Inc. The company has a P/E ratio of 33.64. The average volume for Columbia Property has been 631,800 shares per day over the past 30 days. Columbia Property has a market cap of $3.2 billion and is part of the real estate industry. Shares are up 1% year-to-date as of the close of trading on Wednesday. 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 Columbia Property as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, reasonable valuation levels and good cash flow from operations. 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:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 334.9% when compared to the same quarter one year prior, rising from $12.93 million to $56.23 million.
- CXP, with its decline in revenue, slightly underperformed the industry average of 0.3%. Since the same quarter one year prior, revenues slightly dropped by 0.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- 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, COLUMBIA PROPERTY 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 COLUMBIA PROPERTY TRUST INC is currently extremely low, coming in at 14.48%. It has decreased significantly from the same period last year. Regardless of the weak results of the gross profit margin, the net profit margin of 40.23% is above that of the industry average.
- You can view the full Columbia Property Ratings Report.
- Net operating cash flow has increased to $78.31 million or 10.36% when compared to the same quarter last year. In addition, MFA FINANCIAL INC has also vastly surpassed the industry average cash flow growth rate of -71.43%.
- The gross profit margin for MFA FINANCIAL INC is currently very high, coming in at 89.72%. Regardless of MFA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MFA's net profit margin of 64.36% significantly outperformed against the industry.
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Real Estate Investment Trusts (REITs) industry average. The net income increased by 1.5% when compared to the same quarter one year prior, going from $78.56 million to $79.71 million.
- MFA FINANCIAL INC reported flat earnings per share in the most recent quarter. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, MFA FINANCIAL INC increased its bottom line by earning $0.80 versus $0.79 in the prior year. For the next year, the market is expecting a contraction of 5.0% in earnings ($0.76 versus $0.80).
- You can view the full MFA Financial Ratings Report.
- CMLP's very impressive revenue growth greatly exceeded the industry average of 19.3%. Since the same quarter one year prior, revenues leaped by 67.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CRESTWOOD MIDSTREAM PTNRS LP has improved earnings per share by 14.0% 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, CRESTWOOD MIDSTREAM PTNRS LP reported poor results of -$0.46 versus -$0.40 in the prior year. This year, the market expects an improvement in earnings ($0.39 versus -$0.46).
- The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 45.5% when compared to the same quarter one year ago, falling from -$45.30 million to -$65.90 million.
- CMLP's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 38.12%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The gross profit margin for CRESTWOOD MIDSTREAM PTNRS LP is rather low; currently it is at 17.76%. Regardless of CMLP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CMLP's net profit margin of -10.72% significantly underperformed when compared to the industry average.
- You can view the full Crestwood Midstream Partners Ratings Report.
- Our dividend calendar.