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."Gramercy Property Dividend Yield: 4.50% Gramercy Property (NYSE: GPT) shares currently have a dividend yield of 4.50%. Gramercy Property Trust, Inc. is an equity real estate investment trust. The firm invests in the real estate markets of the United States. It makes investments in industrial and office properties to create its portfolio. The firm was formerly known as Gramercy Capital Corp. The average volume for Gramercy Property has been 2,507,200 shares per day over the past 30 days. Gramercy Property has a market cap of $4.1 billion and is part of the real estate industry. Shares are up 27.7% 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 Gramercy Property as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- GPT's very impressive revenue growth greatly exceeded the industry average of 11.9%. Since the same quarter one year prior, revenues leaped by 145.7%. 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.
- Compared to its closing price of one year ago, GPT's share price has jumped by 31.25%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GPT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Net operating cash flow has increased to $21.75 million or 17.92% when compared to the same quarter last year. In addition, GRAMERCY PROPERTY TRUST has also modestly surpassed the industry average cash flow growth rate of 11.78%.
- GRAMERCY PROPERTY 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 suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, GRAMERCY PROPERTY TRUST swung to a loss, reporting -$0.25 versus $0.64 in the prior year. This year, the market expects an improvement in earnings ($0.10 versus -$0.25).
- 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 23425.0% when compared to the same quarter one year ago, falling from $0.00 million to -$0.93 million.
- You can view the full Gramercy Property 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 481.3% when compared to the same quarter one year prior, rising from $4.53 million to $26.35 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.9%. Since the same quarter one year prior, revenues slightly increased by 3.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. 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 significantly increased by 1275.85% to $53.27 million 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 11.78%.
- RYMAN HOSPITALITY PPTYS INC reported significant earnings per share improvement 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. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, RYMAN HOSPITALITY PPTYS INC's EPS of $2.16 remained unchanged from the prior years' EPS of $2.16. This year, the market expects an improvement in earnings ($2.82 versus $2.16).
- You can view the full Ryman Hospitality Properties Ratings Report.
- GRMN's revenue growth has slightly outpaced the industry average of 3.7%. Since the same quarter one year prior, revenues slightly increased by 6.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- GRMN 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. To add to this, GRMN has a quick ratio of 2.15, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 58.45% to $129.39 million when compared to the same quarter last year. In addition, GARMIN LTD has also modestly surpassed the industry average cash flow growth rate of 56.60%.
- The gross profit margin for GARMIN LTD is rather high; currently it is at 56.56%. Regardless of GRMN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GRMN's net profit margin of 14.11% significantly outperformed against the industry.
- 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 on the basis of return on equity, GARMIN LTD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full Garmin Ratings Report.
- Our dividend calendar.