3 Hold-Rated Dividend Stocks: AINV, MAT, VGR
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer
TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to perform against a general benchmark of the equities market and interest rates.
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."
Dividend Yield: 10.30%
(NASDAQ:
) shares currently have a dividend yield of 10.30%.
Apollo Investment Corporation is business development company and operates as a closed-end management investment company. The company invests in middle market companies. It provides direct equity capital, mezzanine and senior secured loans, and subordinated debt and loans. The company has a P/E ratio of 6.51.
The average volume for Apollo Investment has been 2,291,500 shares per day over the past 30 days. Apollo Investment has a market cap of $1.8 billion and is part of the financial services industry. Shares are up 4.3% year-to-date as of the close of trading on Thursday.
TheStreet Ratings rates
Apollo Investment
as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 12.8%. Since the same quarter one year prior, revenues rose by 16.4%. 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.
- Net operating cash flow has significantly increased by 139.87% to $48.91 million when compared to the same quarter last year. In addition, APOLLO INVESTMENT CORP has also vastly surpassed the industry average cash flow growth rate of -6.01%.
- The gross profit margin for APOLLO INVESTMENT CORP is rather high; currently it is at 69.96%. Regardless of AINV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AINV's net profit margin of -17.67% significantly underperformed when compared to the industry average.
- 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 Capital Markets industry. The net income has significantly decreased by 118.4% when compared to the same quarter one year ago, falling from $105.74 million to -$19.45 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 Capital Markets industry and the overall market, APOLLO INVESTMENT CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Apollo Investment Ratings Report.
Dividend Yield: 5.80%
(NASDAQ:
) shares currently have a dividend yield of 5.80%.
Mattel, Inc. designs, manufactures, and markets a range of toy products worldwide. The company operates in three segments: North America, International, and American Girl. It also publishes Advice and Activity books and the American Girl magazine. The company has a P/E ratio of 18.20.
The average volume for Mattel has been 5,653,100 shares per day over the past 30 days. Mattel has a market cap of $8.9 billion and is part of the consumer durables industry. Shares are down 15.7% year-to-date as of the close of trading on Thursday.
TheStreet Ratings rates
Mattel
as a
. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- Net operating cash flow has slightly increased to $1,033.31 million or 1.33% when compared to the same quarter last year. In addition, MATTEL INC has also modestly surpassed the industry average cash flow growth rate of -1.65%.
- MAT's debt-to-equity ratio of 0.71 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that MAT's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.90 is high and demonstrates strong liquidity.
- 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 Leisure Equipment & Products industry and the overall market on the basis of return on equity, MATTEL INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- 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 Leisure Equipment & Products industry. The net income has significantly decreased by 59.4% when compared to the same quarter one year ago, falling from $369.25 million to $149.90 million.
- You can view the full Mattel Ratings Report.
Dividend Yield: 7.00%
(NYSE:
) shares currently have a dividend yield of 7.00%.
Vector Group Ltd., through its subsidiaries, primarily manufactures and sells cigarettes in the United States. The company operates through Tobacco and Real Estate segments. The company has a P/E ratio of 65.66.
The average volume for Vector Group has been 681,000 shares per day over the past 30 days. Vector Group has a market cap of $2.5 billion and is part of the tobacco industry. Shares are up 6.8% year-to-date as of the close of trading on Thursday.
TheStreet Ratings rates
Vector Group
as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we find that net income has been generally deteriorating over time.
Highlights from the ratings report include:
- VGR's very impressive revenue growth greatly exceeded the industry average of 23.1%. Since the same quarter one year prior, revenues leaped by 59.5%. 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.
- VECTOR GROUP LTD 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. 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, VECTOR GROUP LTD increased its bottom line by earning $0.35 versus $0.32 in the prior year. This year, the market expects an improvement in earnings ($0.62 versus $0.35).
- 43.92% is the gross profit margin for VECTOR GROUP LTD which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, VGR's net profit margin of 3.87% is significantly lower than the industry average.
- 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, despite the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- 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 Tobacco industry. The net income has significantly decreased by 81.9% when compared to the same quarter one year ago, falling from $64.01 million to $11.59 million.
- You can view the full Vector Group Ratings Report.
Other helpful dividend tools from TheStreet:
- Our dividend calendar.
null