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 "Buy." Tupperware Brands Dividend Yield: 4.10% Tupperware Brands (NYSE: TUP) shares currently have a dividend yield of 4.10%. Tupperware Brands Corporation operates as a direct-to-consumer marketer of various products across a range of brands and categories worldwide. The company has a P/E ratio of 17.73. The average volume for Tupperware Brands has been 587,500 shares per day over the past 30 days. Tupperware Brands has a market cap of $3.3 billion and is part of the consumer non-durables industry. Shares are up 6.1% year-to-date as of the close of trading on Monday. 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 Tupperware Brands as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Household Durables industry and the overall market, TUPPERWARE BRANDS CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has increased to -$13.80 million or 24.59% when compared to the same quarter last year. In addition, TUPPERWARE BRANDS CORP has also vastly surpassed the industry average cash flow growth rate of -91.52%.
- The gross profit margin for TUPPERWARE BRANDS CORP is rather high; currently it is at 67.07%. Regardless of TUP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TUP's net profit margin of 5.07% compares favorably to the industry average.
- TUPPERWARE BRANDS CORP's earnings per share declined by 42.1% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, TUPPERWARE BRANDS CORP reported lower earnings of $4.21 versus $5.18 in the prior year. This year, the market expects an improvement in earnings ($4.65 versus $4.21).
- TUP, with its decline in revenue, underperformed when compared the industry average of 6.5%. Since the same quarter one year prior, revenues fell by 12.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full Tupperware Brands Ratings Report.
- CHSP's revenue growth has slightly outpaced the industry average of 9.8%. Since the same quarter one year prior, revenues rose by 10.7%. 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 increased to $33.94 million or 23.12% when compared to the same quarter last year. In addition, CHESAPEAKE LODGING TRUST has also vastly surpassed the industry average cash flow growth rate of -62.88%.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- CHESAPEAKE LODGING TRUST's earnings per share declined by 33.3% 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, CHESAPEAKE LODGING TRUST increased its bottom line by earning $1.01 versus $0.72 in the prior year. This year, the market expects an improvement in earnings ($1.26 versus $1.01).
- You can view the full Chesapeake Lodging Ratings Report.
- The revenue growth greatly exceeded the industry average of 33.1%. Since the same quarter one year prior, revenues rose by 19.4%. 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.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 7.0% when compared to the same quarter one year prior, going from $85.39 million to $91.39 million.
- Net operating cash flow has slightly increased to $131.04 million or 3.46% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -42.26%.
- 46.46% is the gross profit margin for WESTERN GAS PARTNERS LP which we consider to be strong. Regardless of WES's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WES's net profit margin of 27.42% significantly outperformed against the industry.
- The debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.82 is somewhat weak and could be cause for future problems.
- You can view the full Western Gas Partners Ratings Report.
- Our dividend calendar.