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." Ryman Hospitality Properties Dividend Yield: 4.70% Ryman Hospitality Properties (NYSE: RHP) shares currently have a dividend yield of 4.70%. Ryman Hospitality Properties, Inc. owns and operates hotels in the United States. The company has a P/E ratio of 28.64. The average volume for Ryman Hospitality Properties has been 427,900 shares per day over the past 30 days. Ryman Hospitality Properties has a market cap of $2.8 billion and is part of the real estate industry. Shares are up 6.7% year-to-date as of the close of trading on Wednesday. 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 Ryman Hospitality Properties as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.4%. Since the same quarter one year prior, revenues slightly increased by 2.7%. 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.
- 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 Real Estate Investment Trusts (REITs) industry and the overall market, RYMAN HOSPITALITY PPTYS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Compared to its closing price of one year ago, RHP's share price has jumped by 26.42%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, RHP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- RYMAN HOSPITALITY PPTYS INC 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, RYMAN HOSPITALITY PPTYS INC increased its bottom line by earning $2.16 versus $1.77 in the prior year. This year, the market expects an improvement in earnings ($2.17 versus $2.16).
- The gross profit margin for RYMAN HOSPITALITY PPTYS INC is rather low; currently it is at 16.31%. Regardless of RHP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, RHP's net profit margin of 1.76% is significantly lower than the industry average.
- You can view the full Ryman Hospitality Properties Ratings Report.
- NUSTAR ENERGY LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, NUSTAR ENERGY LP turned its bottom line around by earning $2.14 versus -$2.82 in the prior year. This year, the market expects an improvement in earnings ($3.32 versus $2.14).
- 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 221.8% when compared to the same quarter one year prior, rising from $39.74 million to $127.90 million.
- Net operating cash flow has significantly increased by 93.57% to $122.58 million when compared to the same quarter last year. In addition, NUSTAR ENERGY LP has also vastly surpassed the industry average cash flow growth rate of -53.34%.
- 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. 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.
- You can view the full NuStar Energy L.P Ratings Report.
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Capital Markets industry average. The net income increased by 28.8% when compared to the same quarter one year prior, rising from $210.04 million to $270.51 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 2.1%. 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 gross profit margin for KKR & CO LP is currently very high, coming in at 80.08%. Regardless of KKR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, KKR's net profit margin of 10.45% is significantly lower than the industry average.
- KKR & CO LP's earnings per share declined by 12.3% 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 two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, KKR & CO LP reported lower earnings of $1.28 versus $2.29 in the prior year. This year, the market expects an improvement in earnings ($2.61 versus $1.28).
- In its most recent trading session, KKR 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 stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.
- You can view the full KKR Ratings Report.
- Our dividend calendar.