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."Tupperware Brands Dividend Yield: 5.30% Tupperware Brands (NYSE: TUP) shares currently have a dividend yield of 5.30%. Tupperware Brands Corporation operates as a direct-to-consumer marketer of various products across a range of brands and categories worldwide. The company has a P/E ratio of 12.67. The average volume for Tupperware Brands has been 669,500 shares per day over the past 30 days. Tupperware Brands has a market cap of $2.6 billion and is part of the consumer non-durables industry. Shares are down 20% 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 Tupperware Brands as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- 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 Household Durables industry average. The net income increased by 30.3% when compared to the same quarter one year prior, rising from $47.60 million to $62.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Household Durables industry and the overall market, TUPPERWARE BRANDS CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- TUPPERWARE BRANDS CORP has improved earnings per share by 32.3% in the most recent quarter compared to the same quarter a year ago. 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, TUPPERWARE BRANDS CORP reported lower earnings of $4.21 versus $5.18 in the prior year. This year, the market expects an improvement in earnings ($4.42 versus $4.21).
- Net operating cash flow has decreased to $35.90 million or 40.85% when compared to the same quarter last year. Despite a decrease in cash flow of 40.85%, TUPPERWARE BRANDS CORP is still significantly exceeding the industry average of -109.16%.
- The debt-to-equity ratio is very high at 4.92 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.42, which clearly demonstrates the inability to cover short-term cash needs.
- You can view the full Tupperware Brands Ratings Report.
- The revenue fell significantly faster than the industry average of 9.7%. Since the same quarter one year prior, revenues fell by 29.0%. 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 Real Estate Investment Trusts (REITs) industry and the overall market, RAYONIER INC's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for RAYONIER INC is currently lower than what is desirable, coming in at 31.05%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -1.32% is significantly below that of the industry average.
- RAYONIER INC 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. 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, RAYONIER INC reported lower earnings of $0.43 versus $0.80 in the prior year. For the next year, the market is expecting a contraction of 18.6% in earnings ($0.35 versus $0.43).
- 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 109.4% when compared to the same quarter one year ago, falling from $16.35 million to -$1.54 million.
- You can view the full Rayonier Ratings Report.
- Net operating cash flow has significantly increased by 214.36% to $176.43 million when compared to the same quarter last year. In addition, APOLLO INVESTMENT CORP has also vastly surpassed the industry average cash flow growth rate of -425.92%.
- The gross profit margin for APOLLO INVESTMENT CORP is currently very high, coming in at 72.22%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.28% trails the industry average.
- AINV, with its decline in revenue, slightly underperformed the industry average of 6.7%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Capital Markets industry and the overall market, APOLLO INVESTMENT 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 28.58%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 88.88% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- You can view the full Apollo Investment Ratings Report.
- Our dividend calendar.