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."GasLog Partners Dividend Yield: 7.20% GasLog Partners (NYSE: GLOP) shares currently have a dividend yield of 7.20%. GasLog Partners LP acquires, owns, and operates liquefied natural gas (LNG) carriers. The company provides LNG transportation services under long-term charters worldwide. As of February 16, 2015, it had a fleet of five LNG carriers. The company was founded in 2014 and is based in Monaco. The company has a P/E ratio of 32.39. The average volume for GasLog Partners has been 81,200 shares per day over the past 30 days. GasLog Partners has a market cap of $347.9 million and is part of the transportation industry. Shares are down 2.7% 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 GasLog Partners as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet. Highlights from the ratings report include:
- GLOP's very impressive revenue growth greatly exceeded the industry average of 38.6%. Since the same quarter one year prior, revenues leaped by 57.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- GASLOG PARTNERS LP 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 ($2.14 versus $1.48).
- GLOP has underperformed the S&P 500 Index, declining 15.43% from its price level of one year ago.
- In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, GASLOG PARTNERS LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The debt-to-equity ratio of 1.14 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, GLOP's quick ratio is somewhat strong at 1.23, demonstrating the ability to handle short-term liquidity needs.
- You can view the full GasLog Partners Ratings Report.
- The gross profit margin for SOLAR CAPITAL LTD is currently very high, coming in at 70.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 42.52% significantly outperformed against the industry average.
- SLRC, with its decline in revenue, underperformed when compared the industry average of 5.7%. Since the same quarter one year prior, revenues fell by 21.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- SOLAR CAPITAL LTD's earnings per share declined by 16.1% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SOLAR CAPITAL LTD reported lower earnings of $1.12 versus $1.70 in the prior year. This year, the market expects an improvement in earnings ($1.53 versus $1.12).
- Net operating cash flow has significantly decreased to -$23.67 million or 123.89% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, SLRC has underperformed the S&P 500 Index, declining 7.22% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- You can view the full Solar Capital Ratings Report.
- NMM's revenue growth has slightly outpaced the industry average of 1.0%. Since the same quarter one year prior, revenues slightly increased by 0.8%. 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.
- The gross profit margin for NAVIOS MARITIME PARTNERS LP is currently very high, coming in at 92.94%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.15% significantly outperformed against the industry average.
- NMM's debt-to-equity ratio of 0.67 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. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.75 is very high and demonstrates very strong liquidity.
- Net operating cash flow has decreased to $27.34 million or 24.66% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- 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 Marine industry. The net income has significantly decreased by 40.7% when compared to the same quarter one year ago, falling from $18.36 million to $10.88 million.
- You can view the full Navios Maritime Partners L.P Ratings Report.
- Our dividend calendar.