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."New York Mortgage Dividend Yield: 15.00% New York Mortgage (NASDAQ: NYMT) shares currently have a dividend yield of 15.00%. New York Mortgage Trust, Inc., a real estate investment trust (REIT), engages in acquiring, investing in, financing, and managing mortgage-related and financial assets in the United States. The company has a P/E ratio of 11.87. The average volume for New York Mortgage has been 831,000 shares per day over the past 30 days. New York Mortgage has a market cap of $701.3 million and is part of the real estate industry. Shares are up 20.8% 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 New York Mortgage as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins. Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 209.09% to $18.52 million when compared to the same quarter last year. In addition, NEW YORK MORTGAGE TRUST INC has also vastly surpassed the industry average cash flow growth rate of 9.08%.
- NYMT, with its decline in revenue, underperformed when compared the industry average of 12.1%. Since the same quarter one year prior, revenues slightly dropped by 10.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- 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 28.0% when compared to the same quarter one year ago, falling from $23.54 million to $16.95 million.
- 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, NEW YORK MORTGAGE TRUST INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full New York Mortgage Ratings Report.
- SUNCOKE ENERGY PARTNERS LP reported significant earnings per share improvement 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SUNCOKE ENERGY PARTNERS LP increased its bottom line by earning $1.88 versus $1.51 in the prior year. This year, the market expects an improvement in earnings ($1.93 versus $1.88).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 201.5% when compared to the same quarter one year prior, rising from $13.20 million to $39.80 million.
- Despite the weak revenue results, SXCP has significantly outperformed against the industry average of 45.9%. Since the same quarter one year prior, revenues slightly dropped by 4.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for SUNCOKE ENERGY PARTNERS LP is currently lower than what is desirable, coming in at 29.10%. Regardless of SXCP's low profit margin, it has managed to increase from the same period last year.
- The debt-to-equity ratio of 1.13 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, SXCP maintains a poor quick ratio of 0.96, which illustrates the inability to avoid short-term cash problems.
- You can view the full SunCoke Energy Partners Ratings Report.
- TNK's very impressive revenue growth greatly exceeded the industry average of 24.0%. Since the same quarter one year prior, revenues leaped by 53.4%. 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.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TEEKAY TANKERS LTD's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- The gross profit margin for TEEKAY TANKERS LTD is rather high; currently it is at 52.34%. Regardless of TNK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TNK's net profit margin of 23.63% significantly outperformed against the industry.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 57.62%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 26.47% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The debt-to-equity ratio of 1.19 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, TNK maintains a poor quick ratio of 0.93, which illustrates the inability to avoid short-term cash problems.
- You can view the full Teekay Tankers Ratings Report.
- Our dividend calendar.