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."Calamos Asset Management Dividend Yield: 8.00% Calamos Asset Management (NASDAQ: CLMS) shares currently have a dividend yield of 8.00%. Calamos Asset Management Inc. is a publicly owned investment manager. The firm provides investment advisory services to individuals including high net worth individuals, and institutions. It also manages accounts for family offices and private foundations. The company has a P/E ratio of 75.60. The average volume for Calamos Asset Management has been 99,100 shares per day over the past 30 days. Calamos Asset Management has a market cap of $153.6 million and is part of the financial services industry. Shares are down 23.8% 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 Calamos Asset Management as a hold. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- Net operating cash flow has increased to -$13.21 million or 23.80% when compared to the same quarter last year. In addition, CALAMOS ASSET MANAGEMENT INC has also vastly surpassed the industry average cash flow growth rate of -200.02%.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 24.4%. Since the same quarter one year prior, revenues fell by 15.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- CALAMOS ASSET MANAGEMENT INC 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, CALAMOS ASSET MANAGEMENT INC reported lower earnings of $0.19 versus $0.71 in the prior year. This year, the market expects an improvement in earnings ($0.23 versus $0.19).
- The gross profit margin for CALAMOS ASSET MANAGEMENT INC is currently lower than what is desirable, coming in at 34.05%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.72% is significantly below that of the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 37.72%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 900.00% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, CLMS is still more expensive than most of the other companies in its industry.
- You can view the full Calamos Asset Management Ratings Report.
- The revenue growth came in higher than the industry average of 13.7%. Since the same quarter one year prior, revenues rose by 14.3%. 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.
- Net operating cash flow has increased to $77.90 million or 21.02% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 4.52%.
- The gross profit margin for SEASPAN CORP is rather high; currently it is at 68.96%. Regardless of SSW'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 3.30% trails the industry average.
- The share price of SEASPAN CORP has not done very well: it is down 23.85% 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. 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 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 Marine industry. The net income has significantly decreased by 66.6% when compared to the same quarter one year ago, falling from $21.33 million to $7.13 million.
- You can view the full Seaspan Ratings Report.
- The gross profit margin for AMERICAN CAPITAL SR FLTG LTD is currently very high, coming in at 82.14%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 49.89% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 162.40% to $14.44 million when compared to the same quarter last year. In addition, AMERICAN CAPITAL SR FLTG LTD has also vastly surpassed the industry average cash flow growth rate of -200.02%.
- Despite the weak revenue results, ACSF has outperformed against the industry average of 24.4%. Since the same quarter one year prior, revenues slightly dropped by 8.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The share price of AMERICAN CAPITAL SR FLTG LTD has not done very well: it is down 16.89% 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. 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.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Capital Markets industry and the overall market, AMERICAN CAPITAL SR FLTG LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full American Capital Senior Floating Ratings Report.
- Our dividend calendar.