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."Manhattan Bridge Capital Dividend Yield: 7.70% Manhattan Bridge Capital (NASDAQ: LOAN) shares currently have a dividend yield of 7.70%. Manhattan Bridge Capital, Inc., a real estate finance company, originates, services, and manages a portfolio of first mortgage loans in the United States. The company has a P/E ratio of 13.80. The average volume for Manhattan Bridge Capital has been 36,400 shares per day over the past 30 days. Manhattan Bridge Capital has a market cap of $29.9 million and is part of the financial services industry. Shares are up 5.7% 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 Manhattan Bridge Capital as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, attractive valuation levels, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 44.8%. 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.
- Compared to its closing price of one year ago, LOAN's share price has jumped by 48.38%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LOAN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The gross profit margin for MANHATTAN BRIDGE CAPITAL INC is currently very high, coming in at 76.43%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 58.11% significantly outperformed against the industry average.
- Net operating cash flow has increased to $0.48 million or 21.66% when compared to the same quarter last year. In addition, MANHATTAN BRIDGE CAPITAL INC has also modestly surpassed the industry average cash flow growth rate of 15.56%.
- You can view the full Manhattan Bridge Capital Ratings Report.
- NVEC 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. Along with this, the company maintains a quick ratio of 13.53, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has increased to $5.17 million or 15.39% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -22.76%.
- The gross profit margin for NVE CORP is currently very high, coming in at 78.52%. Regardless of NVEC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NVEC's net profit margin of 45.70% significantly outperformed against the industry.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 11.5%. Since the same quarter one year prior, revenues slightly dropped by 1.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- 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. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, NVE CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full NVE Ratings Report.
- NMFC's revenue growth has slightly outpaced the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 12.4%. 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 gross profit margin for NEW MOUNTAIN FINANCE CORP is rather high; currently it is at 68.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 53.45% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 200.05% to $118.01 million when compared to the same quarter last year. In addition, NEW MOUNTAIN FINANCE CORP has also vastly surpassed the industry average cash flow growth rate of -425.92%.
- NEW MOUNTAIN FINANCE CORP's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, NEW MOUNTAIN FINANCE CORP reported lower earnings of $0.87 versus $1.79 in the prior year. This year, the market expects an improvement in earnings ($1.38 versus $0.87).
- The change in net income from the same quarter one year ago has exceeded that of the Capital Markets industry average, but is less than that of the S&P 500. The net income has decreased by 14.4% when compared to the same quarter one year ago, dropping from $23.66 million to $20.26 million.
- You can view the full New Mountain Finance Ratings Report.
- Our dividend calendar.