3 Hold-Rated Dividend Stocks: APLP, ENBL, HTGC
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: 8.30%
(NASDAQ:
) shares currently have a dividend yield of 8.30%.
Archrock Partners, L.P., together with its subsidiaries, provides natural gas contract operations services to customers in the United States.
The average volume for Archrock Partners has been 304,500 shares per day over the past 30 days. Archrock Partners has a market cap of $829.1 million and is part of the energy industry. Shares are up 16.4% year-to-date as of the close of trading on Monday.
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TheStreet Ratings rates
Archrock Partners
as a
. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- 46.15% is the gross profit margin for ARCHROCK PARTNERS LP which we consider to be strong. Regardless of APLP's high profit margin, it has managed to decrease from the same period last year.
- Despite the weak revenue results, APLP has outperformed against the industry average of 35.8%. Since the same quarter one year prior, revenues slightly dropped by 7.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- ARCHROCK PARTNERS LP 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ARCHROCK PARTNERS LP swung to a loss, reporting -$1.65 versus $0.88 in the prior year. This year, the market expects an improvement in earnings ($0.49 versus -$1.65).
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 42.90%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 96.42% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- 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 Energy Equipment & Services industry and the overall market, ARCHROCK PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Archrock Partners Ratings Report.
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Dividend Yield: 8.70%
(NYSE:
) shares currently have a dividend yield of 8.70%.
Enable Midstream Partners, LP owns, operates, and develops gas and crude oil infrastructure assets in the United States. It operates through two segments, Gathering and Processing, and Transportation and Storage.
The average volume for Enable Midstream Partners has been 394,700 shares per day over the past 30 days. Enable Midstream Partners has a market cap of $6.2 billion and is part of the energy industry. Shares are up 58.7% year-to-date as of the close of trading on Monday.
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TheStreet Ratings rates
Enable Midstream Partners
as a
. The company's strengths can be seen in multiple areas, such as its expanding profit margins, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- 36.15% is the gross profit margin for ENABLE MIDSTREAM PARTNERS LP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.89% significantly outperformed against the industry average.
- The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 1.00 is somewhat weak and could be cause for future problems.
- 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. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ENABLE MIDSTREAM PARTNERS LP's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Net operating cash flow has decreased to $117.00 million or 37.76% when compared to the same quarter last year. Despite a decrease in cash flow ENABLE MIDSTREAM PARTNERS LP is still fairing well by exceeding its industry average cash flow growth rate of -49.64%.
- You can view the full Enable Midstream Partners Ratings Report.
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Dividend Yield: 9.70%
(NYSE:
) shares currently have a dividend yield of 9.70%.
Hercules Technology Growth Capital, Inc. The company has a P/E ratio of 10.78.
The average volume for Hercules Capital has been 219,900 shares per day over the past 30 days. Hercules Capital has a market cap of $937.0 million and is part of the real estate industry. Shares are up 5.5% year-to-date as of the close of trading on Monday.
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TheStreet Ratings rates
Hercules Capital
as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, deteriorating net income and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 24.3%. Since the same quarter one year prior, revenues rose by 19.8%. 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.
- The gross profit margin for HERCULES CAPITAL INC is currently very high, coming in at 81.37%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 36.71% significantly outperformed against the industry average.
- The change in net income from the same quarter one year ago has exceeded that of the Capital Markets industry average, but is less than that of the S&P 500. The net income has significantly decreased by 34.8% when compared to the same quarter one year ago, falling from $21.92 million to $14.30 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Capital Markets industry and the overall market, HERCULES CAPITAL INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Hercules Capital Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.