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." Columbia Property Dividend Yield: 4.70% Columbia Property (NYSE: CXP) shares currently have a dividend yield of 4.70%. Columbia Property Trust, Inc is an equity real estate investment trust. The firm invests in the real estate markets of the United States. It focuses on investing in and managing high-quality commercial office properties. The firm was formerly known as Wells Real Estate Investment Trust II Inc. The company has a P/E ratio of 33.36. The average volume for Columbia Property has been 903,900 shares per day over the past 30 days. Columbia Property has a market cap of $3.2 billion and is part of the real estate industry. Shares are up 1.3% year-to-date as of the close of trading on Thursday. 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 Columbia Property as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- CXP's revenue growth has slightly outpaced the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 14.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- COLUMBIA PROPERTY TRUST INC has improved earnings per share by 33.3% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, COLUMBIA PROPERTY TRUST INC increased its bottom line by earning $0.76 versus $0.21 in the prior year. For the next year, the market is expecting a contraction of 84.2% in earnings ($0.12 versus $0.76).
- The gross profit margin for COLUMBIA PROPERTY TRUST INC is rather low; currently it is at 18.32%. Regardless of CXP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CXP's net profit margin of 3.74% is significantly lower than the industry average.
- Net operating cash flow has decreased to $44.53 million or 22.94% 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 Columbia Property 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.
- EJ's revenue growth trails the industry average of 19.4%. Since the same quarter one year prior, revenues slightly increased by 3.6%. 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.
- EJ's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, EJ has a quick ratio of 2.14, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for E-HOUSE CHINA HOLDINGS -ADR is rather high; currently it is at 60.86%. Regardless of EJ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EJ's net profit margin of -14.86% significantly underperformed when compared to the industry average.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Real Estate Management & Development industry and the overall market, E-HOUSE CHINA HOLDINGS -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
- The share price of E-HOUSE CHINA HOLDINGS -ADR has not done very well: it is down 10.81% 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. 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 E-House China Holdings Ratings Report.
- Our dividend calendar.