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." GasLog Partners Dividend Yield: 7.60% GasLog Partners (NYSE: GLOP) shares currently have a dividend yield of 7.60%. GasLog Partners LP acquires, owns, and operates liquefied natural gas (LNG) carriers. The company provides LNG transportation services under long-term charters worldwide. As of February 16, 2015, it had a fleet of five LNG carriers. The company was founded in 2014 and is based in Monaco. The company has a P/E ratio of 30.47. The average volume for GasLog Partners has been 212,800 shares per day over the past 30 days. GasLog Partners has a market cap of $327.3 million and is part of the transportation industry. Shares are down 9.5% 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 GasLog Partners as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet. Highlights from the ratings report include:
- GLOP's very impressive revenue growth greatly exceeded the industry average of 38.7%. Since the same quarter one year prior, revenues leaped by 57.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- GASLOG PARTNERS LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($2.15 versus $1.48).
- GLOP's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 25.93%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter.
- In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, GASLOG PARTNERS LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The debt-to-equity ratio of 1.14 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, GLOP's quick ratio is somewhat strong at 1.23, demonstrating the ability to handle short-term liquidity needs.
- You can view the full GasLog Partners Ratings Report.