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: 9.30% Triangle Capital Corporation (NYSE: TCAP) shares currently have a dividend yield of 9.30%. Triangle Capital Corporation is a business development company specializing in private equity and mezzanine investments. The company has a P/E ratio of 11.56. The average volume for Triangle Capital Corporation has been 257,000 shares per day over the past 30 days. Triangle Capital Corporation has a market cap of $771.3 million and is part of the financial services industry. Shares are up 15.3% year-to-date as of the close of trading on Friday. EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE. 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, disappointing return on equity and weak operating cash flow. 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 13.0%. 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 26.9% in earnings ($2.15 versus $2.94).
- 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.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Capital Markets industry and the overall market, TRIANGLE CAPITAL CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Triangle Capital Corporation Ratings Report.
- The revenue growth came in higher than the industry average of 10.0%. Since the same quarter one year prior, revenues rose by 35.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CORENERGY INFRASTRUCTURE TR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($0.29 versus $0.18).
- 40.93% is the gross profit margin for CORENERGY INFRASTRUCTURE TR which we consider to be strong. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, CORR's net profit margin of 17.10% significantly trails the industry average.
- Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, CORENERGY INFRASTRUCTURE TR underperformed against that of the industry average and is significantly less than that of the S&P 500.
- In its most recent trading session, CORR has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
- You can view the full CorEnergy Infrastructure Ratings Report.
- UMH's revenue growth has slightly outpaced the industry average of 10.0%. Since the same quarter one year prior, revenues rose by 13.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- Net operating cash flow has significantly increased by 11823.21% to $6.57 million when compared to the same quarter last year. In addition, UMH PROPERTIES INC has also vastly surpassed the industry average cash flow growth rate of 10.56%.
- In its most recent trading session, UMH has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- 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 decreased by 21.5% when compared to the same quarter one year ago, dropping from $0.80 million to $0.63 million.
- 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 Real Estate Investment Trusts (REITs) industry and the overall market, UMH PROPERTIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full UMH Properties Ratings Report.
- Our dividend calendar.