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." Trustmark Dividend Yield: 4.20% Trustmark (NASDAQ: TRMK) shares currently have a dividend yield of 4.20%. Trustmark Corporation operates as the bank holding company for Trustmark National Bank, which provides banking and other financial solutions to individuals and corporate institutions in Alabama, Florida, Mississippi, Tennessee, and Texas. The company has a P/E ratio of 12.92. The average volume for Trustmark has been 573,000 shares per day over the past 30 days. Trustmark has a market cap of $1.5 billion and is part of the banking industry. Shares are down 3.7% year-to-date as of the close of trading on Thursday. 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 Trustmark as a hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- The gross profit margin for TRUSTMARK CORP is currently very high, coming in at 93.56%. Regardless of TRMK'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 19.29% trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Commercial Banks industry average, but is greater than that of the S&P 500. The net income has decreased by 0.8% when compared to the same quarter one year ago, dropping from $28.07 million to $27.86 million.
- 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 Commercial Banks industry and the overall market, TRUSTMARK CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Trustmark Ratings Report.
- REGAL ENTERTAINMENT GROUP has improved earnings per share by 16.7% 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, REGAL ENTERTAINMENT GROUP increased its bottom line by earning $0.98 versus $0.68 in the prior year. This year, the market expects an improvement in earnings ($1.02 versus $0.98).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 18.8% when compared to the same quarter one year prior, going from $46.30 million to $55.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.4%. Since the same quarter one year prior, revenues slightly increased by 6.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for REGAL ENTERTAINMENT GROUP is rather low; currently it is at 21.74%. Regardless of RGC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.48% trails the industry average.
- RGC has underperformed the S&P 500 Index, declining 19.00% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- You can view the full Regal Entertainment Group Ratings Report.
- TU's revenue growth trails the industry average of 16.5%. Since the same quarter one year prior, revenues slightly increased by 2.3%. 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 TELUS CORP is currently lower than what is desirable, coming in at 32.83%. Regardless of TU's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.19% trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Diversified Telecommunication Services industry average. The net income has decreased by 16.3% when compared to the same quarter one year ago, dropping from $312.00 million to $261.00 million.
- Net operating cash flow has declined marginally to $863.00 million or 5.88% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full TELUS Ratings Report.
- Our dividend calendar.