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." Artisan Partners Asset Management Dividend Yield: 8.00% Artisan Partners Asset Management (NYSE: APAM) shares currently have a dividend yield of 8.00%. Artisan Partners Asset Management Inc is publicly owned investment manager. It provides its services to pension and profit sharing plans, trusts, endowments, foundations, charitable organizations, government entities, private funds and non-U.S. funds, as well as mutual funds, non-U.S. The company has a P/E ratio of 16.19. The average volume for Artisan Partners Asset Management has been 548,500 shares per day over the past 30 days. Artisan Partners Asset Management has a market cap of $2.2 billion and is part of the financial services industry. Shares are down 14.9% year-to-date as of the close of trading on Wednesday. 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 Artisan Partners Asset Management as a hold. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, poor profit margins and weak operating cash flow. Highlights from the ratings report include:
- 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 Capital Markets industry and the overall market, ARTISAN PARTNERS ASSET MGMT's return on equity significantly exceeds that of both the industry average and the S&P 500.
- ARTISAN PARTNERS ASSET MGMT's earnings per share declined by 19.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ARTISAN PARTNERS ASSET MGMT turned its bottom line around by earning $1.84 versus -$0.72 in the prior year. This year, the market expects an improvement in earnings ($2.20 versus $1.84).
- APAM, with its decline in revenue, slightly underperformed the industry average of 1.9%. Since the same quarter one year prior, revenues slightly dropped by 6.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for ARTISAN PARTNERS ASSET MGMT is currently lower than what is desirable, coming in at 34.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 10.45% trails that of the industry average.
- Net operating cash flow has significantly decreased to $22.61 million or 68.58% 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 Artisan Partners Asset Management Ratings Report.
- 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 3.1%. 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.
- BRANDYWINE REALTY 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, BRANDYWINE REALTY TRUST reported poor results of -$0.22 versus -$0.01 in the prior year. This year, the market expects an improvement in earnings (-$0.08 versus -$0.22).
- The share price of BRANDYWINE REALTY TRUST has not done very well: it is down 13.79% 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. 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, BRANDYWINE REALTY TRUST's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $50.14 million or 10.46% 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 Brandywine Realty Ratings Report.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 4.8% when compared to the same quarter one year prior, going from $26.17 million to $27.43 million.
- 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, GENESIS ENERGY -LP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- GEL, with its decline in revenue, slightly underperformed the industry average of 34.7%. Since the same quarter one year prior, revenues fell by 42.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Looking at the price performance of GEL's shares over the past 12 months, there is not much good news to report: the stock is down 34.53%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.
- The debt-to-equity ratio of 1.44 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, GEL maintains a poor quick ratio of 0.76, which illustrates the inability to avoid short-term cash problems.
- You can view the full Genesis Energy Ratings Report.
- Our dividend calendar.