3 Hold-Rated Dividend Stocks: CVE, WYNN, T
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: 4.90%
(NYSE:
) shares currently have a dividend yield of 4.90%.
Cenovus Energy Inc., an integrated oil company, develops, produces, and markets crude oil, natural gas liquids (NGLs), and natural gas in Canada with refining operations in the United States. The company has a P/E ratio of 20.81.
The average volume for Cenovus Energy has been 2,944,700 shares per day over the past 30 days. Cenovus Energy has a market cap of $13.2 billion and is part of the energy industry. Shares are down 13.5% year-to-date as of the close of trading on Wednesday.
TheStreet Ratings rates
Cenovus Energy
as a
. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and poor profit margins.
Highlights from the ratings report include:
- The current debt-to-equity ratio, 0.54, 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 0.81 is somewhat weak and could be cause for future problems.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 18.7%. Since the same quarter one year prior, revenues fell by 10.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 713.8% when compared to the same quarter one year ago, falling from -$58.00 million to -$472.00 million.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 32.59%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 675.00% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, CVE is still more expensive than most of the other companies in its industry.
- You can view the full Cenovus Energy Ratings Report.
Dividend Yield: 4.30%
(NASDAQ:
) shares currently have a dividend yield of 4.30%.
Wynn Resorts, Limited, together with its subsidiaries, develops, owns, and operates destination casino resorts. It operates in two segments, Macau Operations and Las Vegas Operations. The company operates Wynn Macau and Encore at Wynn Macau resort located in the People's Republic of China. The company has a P/E ratio of 19.51.
The average volume for Wynn Resorts has been 1,910,500 shares per day over the past 30 days. Wynn Resorts has a market cap of $14.2 billion and is part of the leisure industry. Shares are down 6.7% year-to-date as of the close of trading on Wednesday.
TheStreet Ratings rates
Wynn Resorts
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 unimpressive growth in net income, weak operating cash flow and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- 38.51% is the gross profit margin for WYNN RESORTS LTD which we consider to be strong. Regardless of WYNN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.60% trails the industry average.
- WYNN, with its decline in revenue, underperformed when compared the industry average of 7.7%. Since the same quarter one year prior, revenues fell by 25.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 41.27%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 49.04% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- 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 Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 48.9% when compared to the same quarter one year ago, falling from $213.88 million to $109.35 million.
- Net operating cash flow has significantly decreased to $124.19 million or 68.58% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full Wynn Resorts Ratings Report.
Dividend Yield: 5.50%
(NYSE:
) shares currently have a dividend yield of 5.50%.
AT&T Inc. provides telecommunications services in the United States and internationally. The company operates through two segments, Wireless and Wireline. The company has a P/E ratio of 28.92.
The average volume for AT&T has been 26,314,100 shares per day over the past 30 days. AT&T has a market cap of $178.6 billion and is part of the telecommunications industry. Shares are up 1.2% year-to-date as of the close of trading on Wednesday.
TheStreet Ratings rates
AT&T
as a
. 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 also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- T's revenue growth has slightly outpaced the industry average of 2.6%. Since the same quarter one year prior, revenues slightly increased by 3.8%. 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 debt-to-equity ratio is somewhat low, currently at 0.95, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that T's debt-to-equity ratio is low, the quick ratio, which is currently 0.67, displays a potential problem in covering short-term cash needs.
- 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. In comparison to the other companies in the Diversified Telecommunication Services industry and the overall market, AT&T INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Net operating cash flow has decreased to $5,745.00 million or 27.43% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, AT&T INC has marginally lower results.
- You can view the full AT&T Ratings Report.
Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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