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3 Sell-Rated Dividend Stocks: NTI, HLSS, WRE

Home Loan Servicing Solutions

Dividend Yield: 8.40%

Home Loan Servicing Solutions (NASDAQ: HLSS) shares currently have a dividend yield of 8.40%.

Home Loan Servicing Solutions, Ltd., through its subsidiaries, engages in the acquisition of mortgage servicing assets. Its mortgage servicing assets consists of servicing advances, mortgage servicing rights, rights to mortgage servicing rights, and other related assets. The company has a P/E ratio of 10.86.

The average volume for Home Loan Servicing Solutions has been 758,200 shares per day over the past 30 days. Home Loan Servicing Solutions has a market cap of $1.5 billion and is part of the real estate industry. Shares are down 6.6% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Home Loan Servicing Solutions as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has significantly decreased to -$120.72 million or 1779.21% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • HLSS has underperformed the S&P 500 Index, declining 5.11% 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 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 Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, HOME LOAN SERVICING SOLTNS has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The gross profit margin for HOME LOAN SERVICING SOLTNS is currently very high, coming in at 95.36%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 50.82% significantly outperformed against the industry average.
  • HOME LOAN SERVICING SOLTNS has improved earnings per share by 27.3% 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, HOME LOAN SERVICING SOLTNS increased its bottom line by earning $1.97 versus $1.23 in the prior year. This year, the market expects an improvement in earnings ($2.12 versus $1.97).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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