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 Dividend Yield: 11.00% Triangle Capital (NYSE: TCAP) shares currently have a dividend yield of 11.00%. Triangle Capital Corporation is a business development company specializing in private equity and mezzanine investments. The company has a P/E ratio of 9.80. The average volume for Triangle Capital has been 143,400 shares per day over the past 30 days. Triangle Capital has a market cap of $660.6 million and is part of the financial services industry. Shares are up 4.7% 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 Triangle Capital as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 4.3%. Since the same quarter one year prior, revenues rose by 24.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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 302.8% when compared to the same quarter one year prior, rising from -$8.81 million to $17.87 million.
- Net operating cash flow has increased to -$78.57 million or 31.69% when compared to the same quarter last year. Despite an increase in cash flow of 31.69%, TRIANGLE CAPITAL CORP is still growing at a significantly lower rate than the industry average of 138.56%.
- TCAP has underperformed the S&P 500 Index, declining 14.61% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- 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, TRIANGLE CAPITAL CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Triangle Capital Ratings Report.
- The revenue growth came in higher than the industry average of 4.3%. Since the same quarter one year prior, revenues rose by 22.5%. 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 SOLAR SENIOR CAPITAL LTD is currently very high, coming in at 76.38%. Regardless of SUNS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SUNS's net profit margin of -22.92% significantly underperformed when compared to the industry average.
- SOLAR SENIOR CAPITAL LTD 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SOLAR SENIOR CAPITAL LTD reported lower earnings of $1.02 versus $1.11 in the prior year. This year, the market expects an improvement in earnings ($1.41 versus $1.02).
- Net operating cash flow has significantly decreased to -$3.14 million or 103.99% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of SOLAR SENIOR CAPITAL LTD has not done very well: it is down 14.65% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- You can view the full Solar Senior Capital Ratings Report.
- The revenue growth greatly exceeded the industry average of 0.0%. Since the same quarter one year prior, revenues rose by 49.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- RFIL 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 2.65, which clearly demonstrates the ability to cover short-term cash needs.
- 35.14% is the gross profit margin for R F INDUSTRIES LTD which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.02% trails the industry average.
- 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 Electronic Equipment, Instruments & Components industry and the overall market, R F INDUSTRIES LTD's return on equity is below that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$0.08 million or 106.77% 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 RF Industries Ratings Report.
- Our dividend calendar.