What To Hold: 3 Hold-Rated Dividend Stocks STON, WSR, SMTP
SMTP (NASDAQ: SMTP) shares currently have a dividend yield of 7.20%. SMTP, Inc. provides Internet-based services to facilitate email delivery worldwide. It offers services to enable small, medium, and large businesses to outsource the sending of outbound emails. The company has a P/E ratio of 16.60. The average volume for SMTP has been 24,500 shares per day over the past 30 days. SMTP has a market cap of $25.2 million and is part of the internet industry. Shares are up 364.2% year-to-date as of the close of trading on Wednesday. TheStreet Ratings rates SMTP as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 16.5%. Since the same quarter one year prior, revenues slightly increased by 7.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- SMTP 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. Along with this, the company maintains a quick ratio of 2.91, which clearly demonstrates the ability to cover short-term cash needs.
- SMTP INC reported flat earnings per share in the most recent quarter. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, SMTP INC increased its bottom line by earning $0.35 versus $0.25 in the prior year.
- 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 Internet Software & Services industry and the overall market, SMTP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- SMTP has underperformed the S&P 500 Index, declining 8.06% 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.
- You can view the full SMTP Ratings Report.
- Our dividend calendar.
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