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." BCE Dividend Yield: 4.70% BCE (NYSE: BCE) shares currently have a dividend yield of 4.70%. BCE Inc., a telecommunications and media company, provides wireless, wireline, Internet, and television (TV) services to residential, business, and wholesale customers in Canada. The company operates through Bell Wireless, Bell Wireline, and Bell Media segments. The company has a P/E ratio of 18.88. The average volume for BCE has been 989,000 shares per day over the past 30 days. BCE has a market cap of $37.3 billion and is part of the telecommunications industry. Shares are up 10.2% 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 BCE as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and relatively strong performance when compared with the S&P 500 during the past year. We feel its strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- BCE's revenue growth trails the industry average of 15.2%. Since the same quarter one year prior, revenues slightly increased by 1.4%. 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.
- BCE INC's earnings per share declined by 7.9% in the most recent quarter compared to the same quarter a year ago. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, BCE INC increased its bottom line by earning $2.98 versus $2.97 in the prior year.
- Compared to where it was trading a year ago, BCE's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed results. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Diversified Telecommunication Services industry average, but is greater than that of the S&P 500. The net income has decreased by 8.8% when compared to the same quarter one year ago, dropping from $582.00 million to $531.00 million.
- Net operating cash flow has declined marginally to $1,510.00 million or 1.11% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full BCE Ratings Report.
- DOC's very impressive revenue growth greatly exceeded the industry average of 8.0%. Since the same quarter one year prior, revenues leaped by 105.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- PHYSICIANS REALTY TR 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. During the past fiscal year, PHYSICIANS REALTY TR turned its bottom line around by earning $0.14 versus -$0.19 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus $0.14).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 224.0% when compared to the same quarter one year prior, rising from $1.71 million to $5.54 million.
- 39.52% is the gross profit margin for PHYSICIANS REALTY TR which we consider to be strong. Regardless of DOC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DOC's net profit margin of 13.71% is significantly lower than the industry average.
- Compared to where it was trading a year ago, DOC's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Physicians Realty Ratings Report.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 76.4% when compared to the same quarter one year prior, rising from $15.13 million to $26.69 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 2.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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 Real Estate Investment Trusts (REITs) industry and the overall market, RYMAN HOSPITALITY PPTYS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has increased to $75.36 million or 15.04% when compared to the same quarter last year. In addition, RYMAN HOSPITALITY PPTYS INC has also vastly surpassed the industry average cash flow growth rate of -69.51%.
- RYMAN HOSPITALITY PPTYS INC 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, RYMAN HOSPITALITY PPTYS INC increased its bottom line by earning $2.16 versus $1.77 in the prior year. For the next year, the market is expecting a contraction of 2.8% in earnings ($2.10 versus $2.16).
- You can view the full Ryman Hospitality Properties Ratings Report.
- Our dividend calendar.