3 Hold-Rated Dividend Stocks: VIP, ARCP, HTA
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 and 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."
VimpelCom
Dividend Yield: 13.50%
(NYSE:
) shares currently have a dividend yield of 13.50%.
VimpelCom Ltd., a telecommunications service operator, provides voice and data services through a range of traditional and broadband mobile and fixed technologies. The company has a P/E ratio of 7.59.
The average volume for VimpelCom has been 1,280,700 shares per day over the past 30 days. VimpelCom has a market cap of $16.9 billion and is part of the telecommunications industry. Shares are down 0.8% year to date as of the close of trading on Wednesday.
TheStreet Ratings rates
VimpelCom
as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow.
Highlights from the ratings report include:
- Compared to where it was 12 months ago, this stock has enjoyed a nice rise of 26.52% which was in line with the performance of the S&P 500 Index. Although VIP had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Wireless Telecommunication Services industry average. The net income increased by 28.3% when compared to the same quarter one year prior, rising from $318.00 million to $408.00 million.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 1.7%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Currently the debt-to-equity ratio of 1.89 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, VIP maintains a poor quick ratio of 0.84, which illustrates the inability to avoid short-term cash problems.
- Net operating cash flow has decreased to $1,274.00 million or 20.72% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, VIMPELCOM LTD has marginally lower results.
- You can view the full VimpelCom Ratings Report.
American Realty Capital Properties
Dividend Yield: 6.10%
American Realty Capital Properties
(NASDAQ:
) shares currently have a dividend yield of 6.10%.
American Realty Capital Properties, Inc. owns and acquires single tenant, freestanding commercial real estate that is net leased on a medium-term basis, primarily to investment grade credit rated and other creditworthy tenants. The company principally invests in retail and office properties.
The average volume for American Realty Capital Properties has been 3,607,300 shares per day over the past 30 days. American Realty Capital Properties has a market cap of $2.3 billion and is part of the real estate industry. Shares are up 13.6% year to date as of the close of trading on Wednesday.
TheStreet Ratings rates
American Realty Capital Properties
as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- ARCP's very impressive revenue growth greatly exceeded the industry average of 12.3%. Since the same quarter one year prior, revenues leaped by 544.2%. 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.
- Compared to its closing price of one year ago, ARCP's share price has jumped by 42.79%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- AMERICAN RLTY CAP PPTY INC has exprienced 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 year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, AMERICAN RLTY CAP PPTY INC reported poor results of -$0.89 versus -$0.24 in the prior year. This year, the market expects an improvement in earnings (-$0.71 versus -$0.89).
- 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, AMERICAN RLTY CAP PPTY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$6.77 million or 847.68% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full American Realty Capital Properties Ratings Report.
Healthcare Trust of America
Dividend Yield: 5.10%
(NYSE:
) shares currently have a dividend yield of 5.10%.
No company description available.
The average volume for Healthcare Trust of America has been 1,463,900 shares per day over the past 30 days. Healthcare Trust of America has a market cap of $1.2 billion and is part of the real estate industry. Shares are up 13.5% year to date as of the close of trading on Wednesday.
TheStreet Ratings rates
Healthcare Trust of America
as a
. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, increase in net income and revenue growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
Highlights from the ratings report include:
- 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 528.9% when compared to the same quarter one year prior, rising from -$0.32 million to $1.35 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 8.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- HEALTHCARE TRUST OF AMERICA has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HEALTHCARE TRUST OF AMERICA reported poor results of -$0.10 versus $0.00 in the prior year. This year, the market expects an improvement in earnings ($0.09 versus -$0.10).
- Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, HEALTHCARE TRUST OF AMERICA underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for HEALTHCARE TRUST OF AMERICA is rather low; currently it is at 16.04%. Regardless of HTA's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, HTA's net profit margin of 1.76% is significantly lower than the industry average.
- You can view the full Healthcare Trust of America Ratings Report.
Other helpful dividend tools from TheStreet:
- Our dividend calendar.
null