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."Triangle Capital Corporation Dividend Yield: 12.40% Triangle Capital Corporation (NYSE: TCAP) shares currently have a dividend yield of 12.40%. Triangle Capital Corporation is a business development company specializing in private equity and mezzanine investments. The company has a P/E ratio of 8.67. The average volume for Triangle Capital Corporation has been 155,200 shares per day over the past 30 days. Triangle Capital Corporation has a market cap of $579.9 million and is part of the financial services industry. Shares are down 15% 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 Triangle Capital Corporation as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- TCAP's revenue growth has slightly outpaced the industry average of 6.9%. Since the same quarter one year prior, revenues rose by 11.6%. 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 TRIANGLE CAPITAL CORP is currently very high, coming in at 84.48%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 43.75% significantly outperformed against the industry average.
- 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 on the basis of return on equity, TRIANGLE CAPITAL CORP underperformed against that of the industry average and is significantly less than that of 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 29.49%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 57.47% 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 Triangle Capital Corporation Ratings Report.
- JMP GROUP LLC reported significant earnings per share improvement 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, JMP GROUP LLC increased its bottom line by earning $0.56 versus $0.15 in the prior year. This year, the market expects an improvement in earnings ($0.88 versus $0.56).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 82.3% when compared to the same quarter one year prior, rising from $3.20 million to $5.83 million.
- The revenue fell significantly faster than the industry average of 6.9%. Since the same quarter one year prior, revenues fell by 25.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Capital Markets industry and the overall market, JMP GROUP LLC's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for JMP GROUP LLC is currently lower than what is desirable, coming in at 25.87%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 12.31% trails that of the industry average.
- You can view the full JMP Group Ratings Report.
- MARPS 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.
- The gross profit margin for MARINE PETROLEUM TRUST is currently very high, coming in at 100.00%. MARPS has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, MARPS's net profit margin of 109.37% significantly outperformed against the industry.
- MARPS, with its very weak revenue results, has greatly underperformed against the industry average of 34.6%. Since the same quarter one year prior, revenues plummeted by 70.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- MARINE PETROLEUM TRUST 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, MARINE PETROLEUM TRUST reported lower earnings of $0.94 versus $1.41 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 65.5% when compared to the same quarter one year ago, falling from $0.71 million to $0.25 million.
- You can view the full Marine Petroleum Ratings Report.
- Our dividend calendar.