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."Mobile TeleSystems PJSC Dividend Yield: 9.70% Mobile TeleSystems PJSC (NYSE: MBT) shares currently have a dividend yield of 9.70%. Public Joint-Stock Company Mobile TeleSystems provides telecommunication services in Russia and the Commonwealth of Independent States. The company has a P/E ratio of 8.85. The average volume for Mobile TeleSystems PJSC has been 3,307,800 shares per day over the past 30 days. Mobile TeleSystems PJSC has a market cap of $9.0 billion and is part of the telecommunications industry. Shares are up 45.8% 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 Mobile TeleSystems PJSC as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow. Highlights from the ratings report include:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- 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 Wireless Telecommunication Services industry average. The net income increased by 13.1% when compared to the same quarter one year prior, going from $188.35 million to $213.11 million.
- MOBILE TELESYSTEMS PJSC has improved earnings per share by 10.5% 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, MOBILE TELESYSTEMS PJSC reported lower earnings of $0.67 versus $0.92 in the prior year. This year, the market expects an improvement in earnings ($57.07 versus $0.67).
- Currently the debt-to-equity ratio of 1.90 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, MBT maintains a poor quick ratio of 0.86, which illustrates the inability to avoid short-term cash problems.
- Net operating cash flow has decreased to $574.03 million or 15.17% 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 Mobile TeleSystems PJSC Ratings Report.
- NRZ's very impressive revenue growth greatly exceeded the industry average of 12.1%. Since the same quarter one year prior, revenues leaped by 129.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NEW RESIDENTIAL INV CP reported significant earnings per share improvement 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, NEW RESIDENTIAL INV CP reported lower earnings of $1.31 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($1.98 versus $1.31).
- NRZ has underperformed the S&P 500 Index, declining 14.82% 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.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, NEW RESIDENTIAL INV CP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full New Residential Investment Ratings Report.
- GOV's revenue growth has slightly outpaced the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 17.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- 41.45% is the gross profit margin for GOVERNMENT PPTYS INCOME TR which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, GOV's net profit margin of 23.63% significantly trails the industry average.
- GOVERNMENT PPTYS INCOME TR reported significant earnings per share improvement 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, GOVERNMENT PPTYS INCOME TR swung to a loss, reporting -$2.97 versus $0.87 in the prior year. This year, the market expects an improvement in earnings ($0.61 versus -$2.97).
- 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 Real Estate Investment Trusts (REITs) industry and the overall market, GOVERNMENT PPTYS INCOME TR's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Government Properties Income Ratings Report.
- Our dividend calendar.