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: 4.60% Columbia Property (NYSE: CXP) shares currently have a dividend yield of 4.60%. 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 34.51. The average volume for Columbia Property has been 715,700 shares per day over the past 30 days. Columbia Property has a market cap of $3.3 billion and is part of the real estate industry. Shares are up 5.7% 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 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 also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself. 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 9.8%. 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.
- CXP has underperformed the S&P 500 Index, declining 7.45% from its price level of one year ago. 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 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. Despite the weak results of the gross profit margin, the net profit margin of 40.23% has significantly outperformed against the industry average.
- You can view the full Columbia Property Ratings Report.