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." Crescent Point Energy Dividend Yield: 16.80% Crescent Point Energy (NYSE: CPG) shares currently have a dividend yield of 16.80%. Crescent Point Energy Corp. acquires, explores, develops, and produces oil and natural gas properties in Western Canada and the United States. The company has a P/E ratio of 57.77. The average volume for Crescent Point Energy has been 564,400 shares per day over the past 30 days. Crescent Point Energy has a market cap of $6.3 billion and is part of the energy industry. Shares are down 46% year-to-date as of the close of trading on Monday. 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 Crescent Point Energy as a hold. The company's strongest point has been its strong cash flow from operations. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself and deteriorating net income. Highlights from the ratings report include:
- CRESCENT POINT ENERGY CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, CRESCENT POINT ENERGY CORP increased its bottom line by earning $1.19 versus $0.38 in the prior year.
- 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 343.9% when compared to the same quarter one year ago, falling from $98.59 million to -$240.45 million.
- Net operating cash flow has decreased to $491.64 million or 23.95% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, CRESCENT POINT ENERGY CORP has marginally lower results.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 66.42%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 320.83% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, CPG is still more expensive than most of the other companies in its industry.
- You can view the full Crescent Point Energy 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 Commercial Banks industry and the overall market, CORPBANCA's return on equity exceeds that of both the industry average and the S&P 500.
- 49.90% is the gross profit margin for CORPBANCA which we consider to be strong. Regardless of BCA'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 10.88% trails the industry average.
- BCA, with its decline in revenue, underperformed when compared the industry average of 3.0%. Since the same quarter one year prior, revenues fell by 17.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, BCA has underperformed the S&P 500 Index, declining 19.44% 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.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Commercial Banks industry average. The net income has decreased by 13.3% when compared to the same quarter one year ago, dropping from $73.03 million to $63.34 million.
- You can view the full Corpbanca Ratings Report.
- The gross profit margin for HORIZON TECHNOLOGY FINANCE is rather high; currently it is at 62.35%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 52.91% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 204.05% to $5.44 million when compared to the same quarter last year. In addition, HORIZON TECHNOLOGY FINANCE has also vastly surpassed the industry average cash flow growth rate of -430.45%.
- HRZN, with its decline in revenue, underperformed when compared the industry average of 6.8%. Since the same quarter one year prior, revenues slightly dropped by 3.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The share price of HORIZON TECHNOLOGY FINANCE has not done very well: it is down 23.20% 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. 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.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Capital Markets industry average. The net income has significantly decreased by 25.0% when compared to the same quarter one year ago, falling from $5.13 million to $3.85 million.
- You can view the full Horizon Technology Finance Ratings Report.
- Our dividend calendar.