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."Marlin Midstream Partners Dividend Yield: 7.40% Marlin Midstream Partners (NASDAQ: FISH) shares currently have a dividend yield of 7.40%. Marlin Midstream Partners, LP, together with its subsidiaries, acquires, owns, develops, and operates midstream energy assets in the United States. The company operates through two segments, Midstream Natural Gas and Crude Oil Logistics. The company has a P/E ratio of 16.32. The average volume for Marlin Midstream Partners has been 68,400 shares per day over the past 30 days. Marlin Midstream Partners has a market cap of $177.3 million and is part of the energy industry. Shares are up 8.6% year-to-date as of the close of trading on Tuesday. 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 Marlin Midstream Partners as a hold. The company's strongest point has been its expanding profit margins. At the same time, however, we find that the growth in the company's net income has been quite unimpressive. Highlights from the ratings report include:
- MARLIN MIDSTREAM PARTNERS LP 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. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MARLIN MIDSTREAM PARTNERS LP increased its bottom line by earning $1.22 versus $0.36 in the prior year. This year, the market expects an improvement in earnings ($1.36 versus $1.22).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 37.8%. Since the same quarter one year prior, revenues fell by 31.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- The gross profit margin for MARLIN MIDSTREAM PARTNERS LP is currently lower than what is desirable, coming in at 28.94%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -9.89% is significantly below that of the industry average.
- 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 124.7% when compared to the same quarter one year ago, falling from $5.13 million to -$1.27 million.
- You can view the full Marlin Midstream Partners Ratings Report.
- The revenue growth came in higher than the industry average of 0.2%. Since the same quarter one year prior, revenues rose by 17.8%. 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.
- RFIL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.55, which clearly demonstrates the ability to cover short-term cash needs.
- 39.02% is the gross profit margin for R F INDUSTRIES LTD which we consider to be strong. Regardless of RFIL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.94% trails the industry average.
- Net operating cash flow has significantly decreased to -$0.64 million or 170.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 33.50%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 66.66% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- You can view the full RF Industries Ratings Report.
- Net operating cash flow has significantly increased by 103.42% to $29.70 million when compared to the same quarter last year. In addition, SUNCOKE ENERGY PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -46.77%.
- SXCP's debt-to-equity ratio of 0.96 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that SXCP's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.60 is high and demonstrates strong liquidity.
- Despite the weak revenue results, SXCP has outperformed against the industry average of 18.2%. Since the same quarter one year prior, revenues slightly dropped by 5.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 Metals & Mining industry and the overall market on the basis of return on equity, SUNCOKE ENERGY PARTNERS LP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- The share price of SUNCOKE ENERGY PARTNERS LP has not done very well: it is down 23.18% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full SunCoke Energy Partners Ratings Report.
- Our dividend calendar.