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: 4.70% Tupperware Brands (NYSE: TUP) shares currently have a dividend yield of 4.70%. 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 15.41. The average volume for Tupperware Brands has been 873,500 shares per day over the past 30 days. Tupperware Brands has a market cap of $2.9 billion and is part of the consumer non-durables industry. Shares are up 4.3% 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 Tupperware Brands as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and weak operating cash flow. Highlights from the ratings report include:
- 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. 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.
- The gross profit margin for TUPPERWARE BRANDS CORP is currently very high, coming in at 70.68%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.81% is above that of the industry average.
- TUP, with its decline in revenue, underperformed when compared the industry average of 2.0%. Since the same quarter one year prior, revenues fell by 12.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 Household Durables industry average. The net income has significantly decreased by 29.4% when compared to the same quarter one year ago, falling from $82.30 million to $58.10 million.
- The debt-to-equity ratio is very high at 4.79 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 0.44, which clearly demonstrates the inability to cover short-term cash needs.
- You can view the full Tupperware Brands 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 ($1.04 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 7.9%. 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 is off 6.56% from its price level of one year ago, reflecting the general market trend and ignoring their higher earnings per share compared to the year-earlier quarter. 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.
- Net operating cash flow has slightly increased to $56.74 million or 1.20% when compared to the same quarter last year. Despite an increase in cash flow, RETAIL PPTYS OF AMERICA INC's average is still marginally south of the industry average growth rate of 3.58%.
- 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 88.4% when compared to the same quarter one year ago, falling from $25.87 million to $3.01 million.
- The gross profit margin for RETAIL PPTYS OF AMERICA INC is currently lower than what is desirable, coming in at 26.11%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.01% significantly trails the industry average.
- You can view the full Retail Properties of America Ratings Report.
- Our dividend calendar.