3 Hold-Rated Dividend Stocks: PDM, PM, NYMT
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 or Stephanie Link.
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: 4.60%
(NYSE:
) shares currently have a dividend yield of 4.60%.
Piedmont Office Realty Trust, Inc. engages in the acquisition and ownership of commercial real estate properties in the United States. Its property portfolio primarily consists of office and industrial buildings, warehouses, and manufacturing facilities. The company has a P/E ratio of 67.89.
The average volume for Piedmont Office Realty has been 1,036,100 shares per day over the past 30 days. Piedmont Office Realty has a market cap of $2.8 billion and is part of the real estate industry. Shares are down 2.7% year-to-date as of the close of trading on Monday.
TheStreet Ratings rates
Piedmont Office Realty
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
Highlights from the ratings report include:
- PDM's revenue growth has slightly outpaced the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 7.3%. 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 increased to $58.37 million or 24.89% when compared to the same quarter last year. In addition, PIEDMONT OFFICE REALTY TRUST has also vastly surpassed the industry average cash flow growth rate of -43.90%.
- 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, PIEDMONT OFFICE REALTY TRUST's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for PIEDMONT OFFICE REALTY TRUST is rather low; currently it is at 19.71%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 8.52% significantly trails the industry average.
- You can view the full Piedmont Office Realty Ratings Report.
Dividend Yield: 4.80%
(NYSE:
) shares currently have a dividend yield of 4.80%.
Philip Morris International Inc., through its subsidiaries, manufactures and sells cigarettes, other tobacco products, and other nicotine-containing products. The company has a P/E ratio of 17.43.
The average volume for Philip Morris International has been 5,005,000 shares per day over the past 30 days. Philip Morris International has a market cap of $128.3 billion and is part of the tobacco industry. Shares are up 1.8% year-to-date as of the close of trading on Monday.
TheStreet Ratings rates
Philip Morris International
as a
. The company's strengths can be seen in multiple areas, such as its expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, weak operating cash flow and deteriorating net income.
Highlights from the ratings report include:
- Despite the weak revenue results, PM has outperformed against the industry average of 23.1%. Since the same quarter one year prior, revenues slightly dropped by 7.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for PHILIP MORRIS INTERNATIONAL is rather high; currently it is at 66.25%. Regardless of PM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PM's net profit margin of 22.39% compares favorably to the industry average.
- In its most recent trading session, PM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- PHILIP MORRIS INTERNATIONAL's earnings per share declined by 16.9% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, PHILIP MORRIS INTERNATIONAL reported lower earnings of $4.76 versus $5.26 in the prior year. For the next year, the market is expecting a contraction of 9.4% in earnings ($4.31 versus $4.76).
- Net operating cash flow has decreased to $1,354.00 million or 41.63% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full Philip Morris International Ratings Report.
Dividend Yield: 13.70%
(NASDAQ:
) shares currently have a dividend yield of 13.70%.
New York Mortgage Trust, Inc., a real estate investment trust (REIT), is engaged in acquiring, investing in, financing, and managing mortgage-related and financial assets in the United States. The company has a P/E ratio of 5.34.
The average volume for New York Mortgage has been 1,285,000 shares per day over the past 30 days. New York Mortgage has a market cap of $716.4 million and is part of the real estate industry. Shares are up 1.9% year-to-date as of the close of trading on Monday.
TheStreet Ratings rates
New York Mortgage
as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we find that the stock has experienced relatively poor performance when compared with the S&P 500 during the past year.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 3.1%. Since the same quarter one year prior, revenues rose by 34.0%. 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 Real Estate Investment Trusts (REITs) industry and the overall market, NEW YORK MORTGAGE TRUST INC's return on equity exceeds that of both the industry average and the S&P 500.
- 36.12% is the gross profit margin for NEW YORK MORTGAGE TRUST INC which we consider to be strong. 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 31.86% trails the industry average.
- NEW YORK MORTGAGE TRUST INC has improved earnings per share by 23.5% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, NEW YORK MORTGAGE TRUST INC increased its bottom line by earning $1.47 versus $1.11 in the prior year. For the next year, the market is expecting a contraction of 30.9% in earnings ($1.02 versus $1.47).
- In its most recent trading session, NYMT has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- You can view the full New York Mortgage Ratings Report.
Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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