3 Hold-Rated Dividend Stocks: GMLP, WHF, EVOL
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: 12.60%
(NASDAQ:
) shares currently have a dividend yield of 12.60%.
Golar LNG Partners LP owns and operates floating storage regasification units (FSRUs) and liquefied natural gas (LNG) carriers in Brazil, the United Arab Emirates, Indonesia, and Kuwait. As of April 29, 2015, it had a fleet of six FSRUs and four LNG carriers. The company has a P/E ratio of 7.92.
The average volume for Golar LNG Partners has been 233,900 shares per day over the past 30 days. Golar LNG Partners has a market cap of $835.6 million and is part of the transportation industry. Shares are down 42.1% year-to-date as of the close of trading on Tuesday.
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TheStreet Ratings rates
Golar LNG Partners
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and increase in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 33.1%. Since the same quarter one year prior, revenues slightly increased by 4.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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 Oil, Gas & Consumable Fuels industry and the overall market, GOLAR LNG PARTNERS LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for GOLAR LNG PARTNERS LP is currently very high, coming in at 81.67%. Regardless of GMLP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GMLP's net profit margin of 38.81% significantly outperformed against the industry.
- Net operating cash flow has decreased to $45.56 million or 12.60% when compared to the same quarter last year. Despite a decrease in cash flow of 12.60%, GOLAR LNG PARTNERS LP is in line with the industry average cash flow growth rate of -19.63%.
- The debt-to-equity ratio is very high at 2.92 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.40, which clearly demonstrates the inability to cover short-term cash needs.
- You can view the full Golar LNG Partners Ratings Report.
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Dividend Yield: 12.00%
(NASDAQ:
) shares currently have a dividend yield of 12.00%.
Whitehorse Finance, LLC is a business development company. The company has a P/E ratio of 7.97.
The average volume for WhiteHorse Finance has been 48,500 shares per day over the past 30 days. WhiteHorse Finance has a market cap of $176.6 million and is part of the financial services industry. Shares are up 2.2% year-to-date as of the close of trading on Tuesday.
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TheStreet Ratings rates
WhiteHorse Finance
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 a generally disappointing performance in the stock itself and disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 4.7%. Since the same quarter one year prior, revenues rose by 34.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- WHITEHORSE FINANCE INC has improved earnings per share by 11.8% 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, WHITEHORSE FINANCE INC increased its bottom line by earning $1.32 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($1.46 versus $1.32).
- WHF has underperformed the S&P 500 Index, declining 8.53% from its price level of one year ago. 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'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 Capital Markets industry and the overall market on the basis of return on equity, WHITEHORSE FINANCE INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- You can view the full WhiteHorse Finance Ratings Report.
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Dividend Yield: 7.70%
(NASDAQ:
) shares currently have a dividend yield of 7.70%.
Evolving Systems, Inc. provides software solutions and services to the wireless, wireline, and cable markets in the United Kingdom, Nigeria, Mexico, and internationally. The company has a P/E ratio of 13.85.
The average volume for Evolving Systems has been 54,400 shares per day over the past 30 days. Evolving Systems has a market cap of $66.3 million and is part of the computer software & services industry. Shares are down 39.4% year-to-date as of the close of trading on Tuesday.
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TheStreet Ratings rates
Evolving Systems
as a
. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- EVOL's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, EVOL has a quick ratio of 2.01, which demonstrates the ability of the company to cover short-term liquidity needs.
- 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 Software industry and the overall market, EVOLVING SYSTEMS INC's return on equity exceeds that of both the industry average and the S&P 500.
- The gross profit margin for EVOLVING SYSTEMS INC is currently very high, coming in at 74.93%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 12.84% trails the industry average.
- Net operating cash flow has declined marginally to $0.31 million or 5.23% when compared to the same quarter last year. Despite a decrease in cash flow of 5.23%, EVOLVING SYSTEMS INC is in line with the industry average cash flow growth rate of -11.94%.
- 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 Software industry. The net income has significantly decreased by 53.5% when compared to the same quarter one year ago, falling from $1.68 million to $0.78 million.
- You can view the full Evolving Systems Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.