3 Hold-Rated Dividend Stocks: CPTA, WHF, FGP
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: 10.00%
(NASDAQ:
) shares currently have a dividend yield of 10.00%.
Capitala Finance Corp. is a Business Development Company specializing in investments in traditional mezzanine, senior subordinated and unitranche debt, second-lien loans, equity securities issued by lower and traditional middle-market companies, and small and middle-market companies. The company has a P/E ratio of 16.74.
The average volume for Capitala Finance has been 33,200 shares per day over the past 30 days. Capitala Finance has a market cap of $243.3 million and is part of the financial services industry. Shares are up 4.6% year-to-date as of the close of trading on Wednesday.
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TheStreet Ratings rates
Capitala Finance
as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 13.1%. Since the same quarter one year prior, revenues rose by 26.9%. 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 fallen to -$52.66 million from having none in the same quarter last year. Since the company had no net operating cash flow for the prior period, we cannot calculate a percent change in order to compare its growth rate with that of its industry average.
- When compared to other companies in the Capital Markets industry and the overall market, CAPITALA FINANCE CORP's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for CAPITALA FINANCE CORP is rather high; currently it is at 69.95%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, CPTA's net profit margin of 2.77% is significantly lower than 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 96.1% when compared to the same quarter one year ago, falling from $7.91 million to $0.31 million.
- You can view the full Capitala Finance Ratings Report.
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Dividend Yield: 11.10%
(NASDAQ:
) shares currently have a dividend yield of 11.10%.
Whitehorse Finance, LLC is a business development company. The company has a P/E ratio of 8.64.
The average volume for WhiteHorse Finance has been 40,500 shares per day over the past 30 days. WhiteHorse Finance has a market cap of $191.6 million and is part of the financial services industry. Shares are up 11.7% year-to-date as of the close of trading on Wednesday.
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TheStreet Ratings rates
WhiteHorse Finance
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 13.1%. Since the same quarter one year prior, revenues rose by 27.8%. 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 WHITEHORSE FINANCE INC is rather high; currently it is at 60.36%. Regardless of WHF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WHF's net profit margin of 32.63% significantly outperformed against the industry.
- WHITEHORSE FINANCE INC's earnings per share declined by 42.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WHITEHORSE FINANCE INC increased its bottom line by earning $1.32 versus $1.26 in the prior year. This year, the market expects earnings to be in line with last year ($1.32 versus $1.32).
- The share price of WHITEHORSE FINANCE INC has not done very well: it is down 10.43% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
- 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 43.3% when compared to the same quarter one year ago, falling from $6.34 million to $3.59 million.
- You can view the full WhiteHorse Finance Ratings Report.
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Dividend Yield: 8.70%
(NYSE:
) shares currently have a dividend yield of 8.70%.
Ferrellgas Partners, L.P. distributes and sells propane and related equipment and supplies primarily in the United States. The company transports propane to propane distribution locations, tanks on customers' premises, or to portable propane tanks delivered to retailers. The company has a P/E ratio of 71.66.
The average volume for Ferrellgas Partners has been 184,300 shares per day over the past 30 days. Ferrellgas Partners has a market cap of $1.9 billion and is part of the energy industry. Shares are up 3.6% year-to-date as of the close of trading on Wednesday.
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TheStreet Ratings rates
Ferrellgas Partners
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and poor profit margins.
Highlights from the ratings report include:
- FGP's revenue growth has slightly outpaced the industry average of 2.6%. Since the same quarter one year prior, revenues slightly increased by 6.8%. 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.
- Net operating cash flow has increased to -$19.41 million or 43.60% when compared to the same quarter last year. In addition, FERRELLGAS PARTNERS -LP has also vastly surpassed the industry average cash flow growth rate of -76.22%.
- FERRELLGAS PARTNERS -LP's earnings per share declined by 29.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FERRELLGAS PARTNERS -LP reported lower earnings of $0.40 versus $0.68 in the prior year. This year, the market expects an improvement in earnings ($1.02 versus $0.40).
- 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 Gas Utilities industry. The net income has significantly decreased by 32.3% when compared to the same quarter one year ago, falling from -$24.84 million to -$32.88 million.
- In its most recent trading session, FGP has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full Ferrellgas Partners Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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