3 Hold-Rated Dividend Stocks: GHL, OKS, OAK
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: 4.50%
(NYSE:
) shares currently have a dividend yield of 4.50%.
Greenhill & Co., Inc., together with its subsidiaries, operates as an independent investment bank for corporations, partnerships, institutions, and governments worldwide. The company has a P/E ratio of 28.05.
The average volume for Greenhill has been 377,000 shares per day over the past 30 days. Greenhill has a market cap of $1.1 billion and is part of the financial services industry. Shares are down 8.5% year-to-date as of the close of trading on Tuesday.
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TheStreet Ratings rates
Greenhill
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity 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 premium valuation.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 13.2%. Since the same quarter one year prior, revenues slightly increased by 0.4%. 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.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market, GREENHILL & CO INC's return on equity exceeds that of both the industry average and the S&P 500.
- GREENHILL & CO INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, GREENHILL & CO INC reported lower earnings of $1.45 versus $1.56 in the prior year. This year, the market expects an improvement in earnings ($1.93 versus $1.45).
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Capital Markets industry average. The net income has decreased by 3.5% when compared to the same quarter one year ago, dropping from $15.78 million to $15.22 million.
- You can view the full Greenhill Ratings Report.
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Dividend Yield: 7.70%
(NYSE:
) shares currently have a dividend yield of 7.70%.
ONEOK Partners, L.P. engages in the gathering, processing, storage, and transportation of natural gas in the United States. It operates in three segments: Natural Gas Gathering and Processing; Natural Gas Liquids; and Natural Gas Pipelines. The company has a P/E ratio of 17.51.
The average volume for ONEOK Partners has been 961,500 shares per day over the past 30 days. ONEOK Partners has a market cap of $7.4 billion and is part of the energy industry. Shares are up 1.4% year-to-date as of the close of trading on Tuesday.
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TheStreet Ratings rates
ONEOK Partners
as a
. The company's strengths can be seen in multiple areas, such as its increase in net income, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, feeble growth in the company's earnings per share and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 15.3% when compared to the same quarter one year prior, going from $228.35 million to $263.23 million.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 19.6%. Since the same quarter one year prior, revenues fell by 17.5%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- ONEOK PARTNERS -LP reported flat earnings per share in the most recent quarter. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, ONEOK PARTNERS -LP reported lower earnings of $2.34 versus $2.35 in the prior year. For the next year, the market is expecting a contraction of 12.8% in earnings ($2.04 versus $2.34).
- The debt-to-equity ratio of 1.19 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.34, which clearly demonstrates the inability to cover short-term cash needs.
- You can view the full ONEOK Partners Ratings Report.
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Dividend Yield: 4.30%
(NYSE:
) shares currently have a dividend yield of 4.30%.
Oaktree Capital Group, LLC operates as a global investment management firm that focuses on alternative markets. The company has a P/E ratio of 17.67.
The average volume for Oaktree Capital Group has been 320,700 shares per day over the past 30 days. Oaktree Capital Group has a market cap of $2.3 billion and is part of the financial services industry. Shares are up 0.9% year-to-date as of the close of trading on Tuesday.
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TheStreet Ratings rates
Oaktree Capital Group
as a
.
Highlights from the ratings report include:
- OAK, with its decline in revenue, slightly underperformed the industry average of 13.2%. Since the same quarter one year prior, revenues fell by 13.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- OAKTREE CAPITAL GROUP LLC 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, OAKTREE CAPITAL GROUP LLC reported lower earnings of $3.01 versus $6.43 in the prior year. This year, the market expects an improvement in earnings ($3.25 versus $3.01).
- The share price of OAKTREE CAPITAL GROUP LLC has not done very well: it is down 9.89% 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 62.4% when compared to the same quarter one year ago, falling from $64.91 million to $24.39 million.
- You can view the full Oaktree Capital Group Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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