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." Oxbridge Re Holdings Dividend Yield: 8.10% Oxbridge Re Holdings (NASDAQ: OXBR) shares currently have a dividend yield of 8.10%. Oxbridge Re Holdings Limited provides reinsurance business solutions primarily to property and casualty insurers in the Gulf Coast region of the United States. It writes collateralized policies to cover property losses from specified catastrophes. The company has a P/E ratio of 7.04. The average volume for Oxbridge Re Holdings has been 9,200 shares per day over the past 30 days. Oxbridge Re Holdings has a market cap of $35.8 million and is part of the insurance industry. Shares are up 0.7% year-to-date as of the close of trading on Friday. 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 Oxbridge Re Holdings as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good. Highlights from the ratings report include:
- Compared to other companies in the Insurance industry and the overall market, OXBRIDGE RE HOLDINGS LTD's return on equity exceeds that of both the industry average and the S&P 500.
- OXBR's very impressive revenue growth greatly exceeded the industry average of 9.5%. Since the same quarter one year prior, revenues leaped by 249.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- OXBR has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 365.6% when compared to the same quarter one year prior, rising from $0.39 million to $1.83 million.
- OXBRIDGE RE HOLDINGS LTD reported significant earnings per share improvement 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 year. During the past fiscal year, OXBRIDGE RE HOLDINGS LTD increased its bottom line by earning $0.67 versus $0.06 in the prior year.
- You can view the full Oxbridge Re Holdings Ratings Report.