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." Stag Industrial Dividend Yield: 6.50% Stag Industrial (NYSE: STAG) shares currently have a dividend yield of 6.50%. STAG Industrial, Inc. is a real estate investment trust. The firm invests in the real estate markets of United States. It is engaged in investment and management of real estate assets. STAG Industrial, Inc. was founded on July 21, 2010 and is based in Boston, Massachusetts. The average volume for Stag Industrial has been 478,500 shares per day over the past 30 days. Stag Industrial has a market cap of $1.4 billion and is part of the real estate industry. Shares are down 14.2% 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 Stag Industrial as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 28.3%. 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 significantly increased by 50.16% to $21.82 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 0.76%.
- STAG INDUSTRIAL INC's earnings per share declined by 20.0% 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 year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, STAG INDUSTRIAL INC reported poor results of -$0.27 versus -$0.21 in the prior year. This year, the market expects an improvement in earnings (-$0.08 versus -$0.27).
- 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 Real Estate Investment Trusts (REITs) industry and the overall market, STAG INDUSTRIAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for STAG INDUSTRIAL INC is currently extremely low, coming in at 12.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.41% is significantly below that of the industry average.
- You can view the full Stag Industrial Ratings Report.
- The debt-to-equity ratio is somewhat low, currently at 0.69, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, STO has a quick ratio of 1.53, which demonstrates the ability of the company to cover short-term liquidity needs.
- 38.24% is the gross profit margin for STATOIL ASA which we consider to be strong. Regardless of STO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, STO's net profit margin of -29.70% significantly underperformed when compared to the industry average.
- Net operating cash flow has significantly decreased to $3,614.32 million or 60.64% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, STATOIL ASA has marginally lower results.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, STATOIL ASA's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Statoil ASA Ratings Report.
- KRG's very impressive revenue growth greatly exceeded the industry average of 8.5%. Since the same quarter one year prior, revenues leaped by 103.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- This stock has managed to rise its share value by 10.34% over the past twelve months. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, KITE REALTY GROUP TRUST's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for KITE REALTY GROUP TRUST is rather low; currently it is at 21.47%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 8.26% significantly trails the industry average.
- You can view the full Kite Realty Group Ratings Report.
- Our dividend calendar.