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 "Buy."Valley National Bancorp Dividend Yield: 4.80% Valley National Bancorp (NYSE: VLY) shares currently have a dividend yield of 4.80%. Valley National Bancorp operates as the holding company for the Valley National Bank that provides commercial, retail, insurance, and wealth management financial services products. The company operates through Commercial Lending, Consumer Lending, and Investment Management segments. The company has a P/E ratio of 17.98. The average volume for Valley National Bancorp has been 1,450,500 shares per day over the past 30 days. Valley National Bancorp has a market cap of $2.1 billion and is part of the banking industry. Shares are down 6.8% year-to-date as of the close of trading on Tuesday. 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 Valley National Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, expanding profit margins and reasonable valuation levels. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.8%. Since the same quarter one year prior, revenues rose by 15.5%. 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.
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Commercial Banks industry average. The net income increased by 8.4% when compared to the same quarter one year prior, going from $29.52 million to $31.99 million.
- The gross profit margin for VALLEY NATIONAL BANCORP is currently very high, coming in at 77.51%. Regardless of VLY'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 16.32% trails the industry average.
- VALLEY NATIONAL BANCORP's earnings per share declined by 6.7% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, VALLEY NATIONAL BANCORP reported lower earnings of $0.57 versus $0.67 in the prior year. This year, the market expects earnings to be in line with last year ($0.57 versus $0.57).
- You can view the full Valley National Bancorp Ratings Report.
- BCE's revenue growth has slightly outpaced the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 2.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 24.9% when compared to the same quarter one year prior, going from $639.00 million to $798.00 million.
- 49.66% is the gross profit margin for BCE INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.98% is above that of the industry average.
- BCE INC has improved earnings per share by 15.4% 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, BCE INC increased its bottom line by earning $2.97 versus $2.54 in the prior year.
- 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 Diversified Telecommunication Services industry and the overall market on the basis of return on equity, BCE INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full BCE Ratings Report.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Gas Utilities industry average. The net income increased by 0.7% when compared to the same quarter one year prior, going from $40.30 million to $40.60 million.
- 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 Gas Utilities industry and the overall market, QUESTAR CORP's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has slightly increased to $77.80 million or 9.73% when compared to the same quarter last year. In addition, QUESTAR CORP has also modestly surpassed the industry average cash flow growth rate of 2.39%.
- QUESTAR CORP reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, QUESTAR CORP increased its bottom line by earning $1.28 versus $0.91 in the prior year. This year, the market expects an improvement in earnings ($1.29 versus $1.28).
- The gross profit margin for QUESTAR CORP is currently very high, coming in at 77.77%. Regardless of STR's high profit margin, it has managed to decrease from the same period last year.
- You can view the full Questar Ratings Report.
- Our dividend calendar.