3 Hold-Rated Dividend Stocks: GLNG, RPAI, TCK
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: 5.80%
(NASDAQ:
) shares currently have a dividend yield of 5.80%.
Golar LNG Limited, a midstream liquefied natural gas (LNG) company, is engaged in the transportation, regasification and liquefaction, and trading of LNG. The company operates in two segments, Vessel Operations and Commodity Trading. The company has a P/E ratio of 19.42.
The average volume for Golar LNG has been 2,224,600 shares per day over the past 30 days. Golar LNG has a market cap of $2.9 billion and is part of the transportation industry. Shares are down 19% year-to-date as of the close of trading on Tuesday.
TheStreet Ratings rates
Golar LNG
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 disappointing return on equity, weak operating cash flow and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- GLNG's very impressive revenue growth greatly exceeded the industry average of 18.7%. Since the same quarter one year prior, revenues leaped by 84.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels.
- Compared to its price level of one year ago, GLNG is down 8.44% to its most recent closing price of 31.37. Looking ahead, our view is that this company's fundamentals will not have much impact either way, allowing the stock to generally move up or down based on the push and pull of the broad market.
- 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 Oil, Gas & Consumable Fuels industry and the overall market, GOLAR LNG LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $18.98 million or 16.90% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, GOLAR LNG LTD has marginally lower results.
- You can view the full Golar LNG Ratings Report.
Dividend Yield: 4.10%
(NYSE:
) shares currently have a dividend yield of 4.10%.
Retail Properties of America, Inc. is a real estate investment trust. It engages in acquisition, development and management of properties. The trust invests in the real estate markets of United States. The company has a P/E ratio of 114.57.
The average volume for Retail Properties of America has been 1,278,000 shares per day over the past 30 days. Retail Properties of America has a market cap of $3.8 billion and is part of the real estate industry. Shares are down 4% year-to-date as of the close of trading on Tuesday.
TheStreet Ratings rates
Retail Properties of America
as a
. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.
Highlights from the ratings report include:
- RETAIL PPTYS OF AMERICA INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, RETAIL PPTYS OF AMERICA INC turned its bottom line around by earning $0.15 versus -$0.20 in the prior year. This year, the market expects an improvement in earnings ($0.16 versus $0.15).
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 1.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- The gross profit margin for RETAIL PPTYS OF AMERICA INC is rather low; currently it is at 20.95%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, RPAI's net profit margin of 16.91% 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 30.3% when compared to the same quarter one year ago, falling from $37.09 million to $25.87 million.
- You can view the full Retail Properties of America Ratings Report.
Dividend Yield: 4.90%
(NYSE:
) shares currently have a dividend yield of 4.90%.
Teck Resources Limited explores for, develops, and produces natural resources in the Americas, Asia Pacific, Europe, and Africa. Its principal products include copper, including copper concentrates and cathode copper; steelmaking coal; and refined zinc and zinc concentrates. The company has a P/E ratio of 22.41.
The average volume for Teck Resources has been 4,580,300 shares per day over the past 30 days. Teck Resources has a market cap of $9.0 billion and is part of the metals & mining industry. Shares are up 14.6% year-to-date as of the close of trading on Tuesday.
TheStreet Ratings rates
Teck Resources
as a
. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- TCK, with its decline in revenue, slightly underperformed the industry average of 2.5%. Since the same quarter one year prior, revenues slightly dropped by 5.0%. 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 Metals & Mining industry. The net income has significantly decreased by 44.4% when compared to the same quarter one year ago, falling from $232.00 million to $129.00 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. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, TECK RESOURCES LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full Teck Resources Ratings Report.
Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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