3 Hold-Rated Dividend Stocks: NLY, MPW, PSEC
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: 11.30%
(NYSE:
) shares currently have a dividend yield of 11.30%.
Annaly Capital Management, Inc. owns a portfolio of real estate related investments in the United States.
The average volume for Annaly Capital Management has been 7,522,400 shares per day over the past 30 days. Annaly Capital Management has a market cap of $10.1 billion and is part of the real estate industry. Shares are down 3.5% year-to-date as of the close of trading on Friday.
TheStreet Ratings rates
Annaly Capital Management
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 deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- The revenue fell significantly faster than the industry average of 9.9%. Since the same quarter one year prior, revenues fell by 28.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for ANNALY CAPITAL MANAGEMENT is currently very high, coming in at 90.45%. Regardless of NLY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NLY's net profit margin of -107.46% significantly underperformed when compared to the industry average.
- ANNALY CAPITAL MANAGEMENT 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, ANNALY CAPITAL MANAGEMENT swung to a loss, reporting -$0.96 versus $3.72 in the prior year. This year, the market expects an improvement in earnings ($1.17 versus -$0.96).
- 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 164.0% when compared to the same quarter one year ago, falling from $1,028.75 million to -$658.08 million.
- 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 Real Estate Investment Trusts (REITs) industry and the overall market, ANNALY CAPITAL MANAGEMENT's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Annaly Capital Management Ratings Report.
Dividend Yield: 5.90%
(NYSE:
) shares currently have a dividend yield of 5.90%.
Medical Properties Trust, Inc. operates as a real estate investment trust (REIT) in the United States. It acquires, develops, and invests in healthcare facilities; and leases healthcare facilities to healthcare operating companies and healthcare providers. The company has a P/E ratio of 51.45.
The average volume for Medical Properties has been 2,286,100 shares per day over the past 30 days. Medical Properties has a market cap of $3.1 billion and is part of the real estate industry. Shares are up 2.8% year-to-date as of the close of trading on Friday.
TheStreet Ratings rates
Medical Properties
as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 9.9%. Since the same quarter one year prior, revenues rose by 20.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- MEDICAL PROPERTIES TRUST reported flat earnings per share in the most recent quarter. 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, MEDICAL PROPERTIES TRUST reported lower earnings of $0.28 versus $0.58 in the prior year. This year, the market expects an improvement in earnings ($0.92 versus $0.28).
- 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 decreased by 16.2% when compared to the same quarter one year ago, dropping from $17.84 million to $14.95 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 Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, MEDICAL PROPERTIES TRUST underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full Medical Properties Ratings Report.
Dividend Yield: 11.40%
(NASDAQ:
) shares currently have a dividend yield of 11.40%.
Prospect Capital Corporation is a business development company. The company has a P/E ratio of 8.83.
The average volume for Prospect Capital Corporation has been 3,612,700 shares per day over the past 30 days. Prospect Capital Corporation has a market cap of $3.1 billion and is part of the financial services industry. Shares are up 5.7% year-to-date as of the close of trading on Friday.
TheStreet Ratings rates
Prospect Capital Corporation
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 13.1%. Since the same quarter one year prior, revenues rose by 11.7%. 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 significantly increased by 56.83% to -$125.47 million when compared to the same quarter last year. In addition, PROSPECT CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of 6.53%.
- The net income growth from the same quarter one year ago has exceeded that of the Capital Markets industry average, but is less than that of the S&P 500. The net income increased by 0.7% when compared to the same quarter one year prior, going from $85.36 million to $85.97 million.
- PROSPECT CAPITAL CORP's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. 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, PROSPECT CAPITAL CORP increased its bottom line by earning $1.08 versus $1.07 in the prior year. For the next year, the market is expecting a contraction of 1.9% in earnings ($1.06 versus $1.08).
- 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. When compared to other companies in the Capital Markets industry and the overall market, PROSPECT CAPITAL CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Prospect Capital Corporation Ratings Report.
Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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