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." Regal Entertainment Group Dividend Yield: 4.30% Regal Entertainment Group (NYSE: RGC) shares currently have a dividend yield of 4.30%. Regal Entertainment Group, through its subsidiaries, operates as a motion picture exhibitor in the United States. It develops, acquires, and operates multi-screen theatres primarily in mid-sized metropolitan markets and suburban growth areas of larger metropolitan markets. The company has a P/E ratio of 24.46. The average volume for Regal Entertainment Group has been 795,500 shares per day over the past 30 days. Regal Entertainment Group has a market cap of $2.7 billion and is part of the media industry. Shares are down 4.3% 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 Regal Entertainment Group as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, increase in stock price during the past year and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 2025.0% when compared to the same quarter one year prior, rising from -$1.20 million to $23.10 million.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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 REGAL ENTERTAINMENT GROUP is rather low; currently it is at 18.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.34% trails that of the industry average.
- Net operating cash flow has decreased to $101.90 million or 20.39% 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.
- You can view the full Regal Entertainment Group Ratings Report.
- The revenue growth significantly trails the industry average of 56.2%. Since the same quarter one year prior, revenues slightly increased by 5.1%. 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.
- 35.62% is the gross profit margin for ROGERS COMMUNICATIONS which we consider to be strong. Regardless of RCI'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 8.03% trails the industry average.
- The debt-to-equity ratio is very high at 3.04 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.38, which clearly demonstrates the inability to cover short-term cash needs.
- Net operating cash flow has decreased to $227.00 million or 44.36% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ROGERS COMMUNICATIONS has marginally lower results.
- You can view the full Rogers Communications Ratings Report.
- CM's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 3.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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 Commercial Banks industry and the overall market, CANADIAN IMPERIAL BANK's return on equity exceeds that of both the industry average and the S&P 500.
- The gross profit margin for CANADIAN IMPERIAL BANK is currently very high, coming in at 77.80%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 21.50% trails the industry average.
- CANADIAN IMPERIAL BANK reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CANADIAN IMPERIAL BANK reported lower earnings of $7.85 versus $8.12 in the prior year.
- CM has underperformed the S&P 500 Index, declining 14.06% from its price level of one year ago. 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 Canadian Imperial Bank of Commerce Ratings Report.
- Our dividend calendar.