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 "Sell."GasLog Partners Dividend Yield: 9.40% GasLog Partners (NYSE: GLOP) shares currently have a dividend yield of 9.40%. 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 10.34. The average volume for GasLog Partners has been 310,200 shares per day over the past 30 days. GasLog Partners has a market cap of $403.9 million and is part of the transportation industry. Shares are down 26.3% 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 sell. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures. Highlights from the ratings report include:
- 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.
- 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.
- 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 42.12%, 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.
- The gross profit margin for GASLOG PARTNERS LP is currently very high, coming in at 78.76%. Regardless of GLOP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GLOP's net profit margin of 39.58% significantly outperformed against the industry.
- 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 ($2.20 versus $1.48).
- You can view the full GasLog Partners Ratings Report.
- 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 238.0% when compared to the same quarter one year ago, falling from $18.04 million to -$24.90 million.
- 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 Investment Trusts (REITs) industry and the overall market, RESOURCE CAPITAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 41.64%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 318.18% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- RESOURCE CAPITAL 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. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, RESOURCE CAPITAL CORP increased its bottom line by earning $0.34 versus $0.33 in the prior year. For the next year, the market is expecting a contraction of 91.2% in earnings ($0.03 versus $0.34).
- The revenue growth came in higher than the industry average of 9.8%. Since the same quarter one year prior, revenues rose by 20.1%. 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.
- You can view the full Resource Capital Ratings Report.
- 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 Marine industry. The net income has significantly decreased by 1399.5% when compared to the same quarter one year ago, falling from $2.05 million to -$26.68 million.
- The gross profit margin for NAVIOS MARITIME HOLDINGS INC is currently extremely low, coming in at 14.82%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -22.55% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$0.36 million or 101.20% 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.
- The debt-to-equity ratio of 1.44 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, NM has managed to keep a strong quick ratio of 1.69, which demonstrates the ability to cover short-term cash needs.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 60.22%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 3000.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- You can view the full Navios Maritime Holdings Ratings Report.
- Our dividend calendar.