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."Annaly Capital Management Dividend Yield: 11.30% Annaly Capital Management (NYSE: NLY) shares currently have a dividend yield of 11.30%. Annaly Capital Management, Inc. owns a portfolio of real estate related investments in the United States. The company has a P/E ratio of 13.31. The average volume for Annaly Capital Management has been 7,416,900 shares per day over the past 30 days. Annaly Capital Management has a market cap of $10.1 billion and is part of the real estate industry. Shares are down 1.6% 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 Annaly Capital Management 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, disappointing return on equity and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- The revenue fell significantly faster than the industry average of 3.1%. Since the same quarter one year prior, revenues fell by 28.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for ANNALY CAPITAL MANAGEMENT is currently very high, coming in at 90.45%. Regardless of NLY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NLY's net profit margin of -107.46% significantly underperformed when compared to the industry average.
- ANNALY CAPITAL MANAGEMENT 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, ANNALY CAPITAL MANAGEMENT swung to a loss, reporting -$0.96 versus $3.72 in the prior year. This year, the market expects an improvement in earnings ($1.21 versus -$0.96).
- 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 164.0% when compared to the same quarter one year ago, falling from $1,028.75 million to -$658.08 million.
- 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 Real Estate Investment Trusts (REITs) industry and the overall market, ANNALY CAPITAL MANAGEMENT's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Annaly Capital Management Ratings Report.
- DOC's very impressive revenue growth greatly exceeded the industry average of 0.3%. 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 27.25% 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.
- HP's revenue growth has slightly outpaced the industry average of 12.4%. Since the same quarter one year prior, revenues rose by 18.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- HP's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, HP has a quick ratio of 2.20, which demonstrates the ability of the company to cover short-term liquidity needs.
- HP'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 25.23%, 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 company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, HELMERICH & PAYNE has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full Helmerich & Payne Ratings Report.
- Our dividend calendar.