3 Hold-Rated Dividend Stocks: OGE, OFC, GLOG

These 3 dividend stocks are rated a Hold by TheStreet
By TheStreet Wire ,

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."

OGE Energy

Dividend Yield: 4.10%

OGE Energy

(NYSE:

OGE

) shares currently have a dividend yield of 4.10%.

OGE Energy Corp., together with its subsidiaries, operates as an energy and energy services provider that offers physical delivery and related services for electricity and natural gas primarily in the south central United States. The company has a P/E ratio of 17.62.

The average volume for OGE Energy has been 1,251,400 shares per day over the past 30 days. OGE Energy has a market cap of $5.3 billion and is part of the utilities industry. Shares are down 26.4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

OGE Energy

as a

hold

. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • 45.67% is the gross profit margin for OGE ENERGY CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.44% is above that of the industry average.
  • OGE, with its decline in revenue, slightly underperformed the industry average of 0.1%. Since the same quarter one year prior, revenues slightly dropped by 4.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • OGE ENERGY CORP's earnings per share declined by 41.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, OGE ENERGY CORP increased its bottom line by earning $1.98 versus $1.95 in the prior year. For the next year, the market is expecting a contraction of 7.1% in earnings ($1.84 versus $1.98).
  • 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 Electric Utilities industry. The net income has significantly decreased by 40.6% when compared to the same quarter one year ago, falling from $187.30 million to $111.20 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 26.57%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 41.48% 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, OGE is still more expensive than most of the other companies in its industry.

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Corporate Office Properties

Dividend Yield: 5.00%

Corporate Office Properties

(NYSE:

OFC

) shares currently have a dividend yield of 5.00%.

Corporate Office Properties Trust, a real estate investment trust (REIT), engages in the acquisition, development, ownership, management, and leasing of suburban office properties. The company has a P/E ratio of 18.96.

The average volume for Corporate Office Properties has been 956,400 shares per day over the past 30 days. Corporate Office Properties has a market cap of $2.1 billion and is part of the real estate industry. Shares are down 23.6% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Corporate Office Properties

as a

hold

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, increase in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • CORP OFFICE PPTYS TR 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, CORP OFFICE PPTYS TR INC increased its bottom line by earning $0.25 versus $0.22 in the prior year. This year, the market expects an improvement in earnings ($0.96 versus $0.25).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 295.2% when compared to the same quarter one year prior, rising from $22.72 million to $89.80 million.
  • OFC, with its decline in revenue, slightly underperformed the industry average of 6.0%. Since the same quarter one year prior, revenues slightly dropped by 1.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • OFC has underperformed the S&P 500 Index, declining 16.42% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The gross profit margin for CORP OFFICE PPTYS TR INC is currently lower than what is desirable, coming in at 30.18%. It has decreased from the same quarter the previous year. Despite the weak results of the gross profit margin, the net profit margin of 59.29% has significantly outperformed against the industry average.

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GasLog

Dividend Yield: 4.70%

GasLog

(NYSE:

GLOG

) shares currently have a dividend yield of 4.70%.

GasLog Ltd., together with its subsidiaries, owns, operates, and manages vessels in the liquefied natural gas (LNG) market worldwide. It provides maritime services for the transportation of LNG; and LNG vessel management services. As of August 18, 2015, the company operated 11 LNG carriers. The company has a P/E ratio of 15.02.

The average volume for GasLog has been 904,200 shares per day over the past 30 days. GasLog has a market cap of $967.6 million and is part of the transportation industry. Shares are down 42% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

GasLog

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 37.2%. Since the same quarter one year prior, revenues slightly increased by 6.4%. 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 gross profit margin for GASLOG LTD is currently very high, coming in at 72.01%. Regardless of GLOG'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 -6.88% trails the industry average.
  • Net operating cash flow has decreased to $39.55 million or 13.16% when compared to the same quarter last year. Despite a decrease in cash flow GASLOG LTD is still fairing well by exceeding its industry average cash flow growth rate of -27.14%.
  • GASLOG LTD 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, GASLOG LTD reported lower earnings of $0.53 versus $0.90 in the prior year. For the next year, the market is expecting a contraction of 71.7% in earnings ($0.15 versus $0.53).
  • 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 128.5% when compared to the same quarter one year ago, falling from $25.50 million to -$7.28 million.

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