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."AG Mortgage Investment Dividend Yield: 12.80% AG Mortgage Investment (NYSE: MITT) shares currently have a dividend yield of 12.80%. AG Mortgage Investment Trust, Inc., a real estate investment trust, focuses on investing, acquiring, and managing a portfolio of mortgage assets, other real estate-related securities, and financial assets. It invests in residential mortgage-backed securities (RMBS), for which a U.S. The company has a P/E ratio of 6.87. The average volume for AG Mortgage Investment has been 184,300 shares per day over the past 30 days. AG Mortgage Investment has a market cap of $530.3 million and is part of the real estate industry. Shares are up 0.6% 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 AG Mortgage Investment as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- The gross profit margin for AG MORTGAGE INVESTMENT TRUST is currently very high, coming in at 77.50%. Regardless of MITT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MITT's net profit margin of 46.22% significantly outperformed against the industry.
- The revenue fell significantly faster than the industry average of 8.5%. Since the same quarter one year prior, revenues fell by 29.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Net operating cash flow has declined marginally to $23.29 million or 1.90% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, AG MORTGAGE INVESTMENT TRUST has marginally lower results.
- 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 59.1% when compared to the same quarter one year ago, falling from $31.19 million to $12.76 million.
- You can view the full AG Mortgage Investment Ratings Report.
- 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, NEW YORK MORTGAGE TRUST INC's return on equity exceeds that of both the industry average and the S&P 500.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 3.7% when compared to the same quarter one year prior, going from $22.71 million to $23.54 million.
- The gross profit margin for NEW YORK MORTGAGE TRUST INC is currently lower than what is desirable, coming in at 26.18%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 23.41% trails that of the industry average.
- Net operating cash flow has decreased to $5.99 million or 43.37% 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 New York Mortgage Ratings Report.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Management & Development industry. The net income increased by 111.1% when compared to the same quarter one year prior, rising from $44.95 million to $94.90 million.
- GZT's revenue growth trails the industry average of 19.4%. Since the same quarter one year prior, revenues slightly increased by 6.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- GAZIT GLOBE 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, GAZIT GLOBE reported lower earnings of $0.10 versus $1.51 in the prior year.
- The debt-to-equity ratio is very high at 5.32 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, GZT maintains a poor quick ratio of 0.73, which illustrates the inability to avoid short-term cash problems.
- 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 on the basis of return on equity, GAZIT GLOBE underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full Gazit-Globe Ratings Report.
- Our dividend calendar.