3 Hold-Rated Dividend Stocks: TCPC, SLRC, CCLP

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."

TCP Capital

Dividend Yield: 9.60%

TCP Capital

(NASDAQ:

TCPC

) shares currently have a dividend yield of 9.60%.

TCP Capital Corp. is a business development company specializing in direct equity and debt investments in middle-market, senior secured loans, junior loans, originated loans, mezzanine, senior debt instruments, bonds, and secondary-market investments. It seeks to invest in the United States. The company has a P/E ratio of 9.72.

The average volume for TCP Capital has been 164,700 shares per day over the past 30 days. TCP Capital has a market cap of $736.5 million and is part of the financial services industry. Shares are down 9.5% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

TCP Capital

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and expanding profit margins. 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:

  • TCPC's very impressive revenue growth greatly exceeded the industry average of 6.3%. Since the same quarter one year prior, revenues leaped by 58.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 58.6% when compared to the same quarter one year prior, rising from $12.40 million to $19.67 million.
  • Net operating cash flow has significantly increased by 131.58% to $23.42 million when compared to the same quarter last year. Despite an increase in cash flow of 131.58%, TCP CAPITAL CORP is still growing at a significantly lower rate than the industry average of 230.25%.
  • TCPC has underperformed the S&P 500 Index, declining 8.07% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • 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, TCP CAPITAL CORP's return on equity is below that of both the industry average and the S&P 500.

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Solar Capital

Dividend Yield: 9.10%

Solar Capital

(NASDAQ:

SLRC

) shares currently have a dividend yield of 9.10%.

Solar Capital Ltd. is a business development company specializing in investments in leveraged middle market companies. The company has a P/E ratio of 22.23.

The average volume for Solar Capital has been 196,600 shares per day over the past 30 days. Solar Capital has a market cap of $745.7 million and is part of the financial services industry. Shares are down 3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Solar Capital

as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income increased by 1.1% when compared to the same quarter one year prior, going from $17.08 million to $17.28 million.
  • The gross profit margin for SOLAR CAPITAL LTD is currently very high, coming in at 70.13%. Regardless of SLRC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SLRC's net profit margin of 61.74% significantly outperformed against the industry.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.3%. Since the same quarter one year prior, revenues slightly dropped by 0.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 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, SOLAR CAPITAL LTD's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$80.90 million or 193.47% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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CSI Compressco

Dividend Yield: 13.90%

CSI Compressco

(NASDAQ:

CCLP

) shares currently have a dividend yield of 13.90%.

CSI Compressco LP provides compression services and equipment for natural gas and oil production, gathering, transportation, processing, and storage applications in the United States, Latin America, Canada, and internationally.

The average volume for CSI Compressco has been 94,500 shares per day over the past 30 days. CSI Compressco has a market cap of $478.2 million and is part of the energy industry. Shares are up 9.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

CSI Compressco

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth 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, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:

  • CCLP's very impressive revenue growth greatly exceeded the industry average of 31.2%. Since the same quarter one year prior, revenues leaped by 293.9%. 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 317.64% to $19.72 million when compared to the same quarter last year. In addition, CSI COMPRESSCO LP has also vastly surpassed the industry average cash flow growth rate of -18.53%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.78%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 87.09% 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, CCLP is still more expensive than most of the other companies in its industry.
  • 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 Energy Equipment & Services industry and the overall market on the basis of return on equity, CSI COMPRESSCO LP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for CSI COMPRESSCO LP is currently lower than what is desirable, coming in at 33.04%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 0.91% trails that of the industry average.

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