What To Hold: 3 Hold-Rated Dividend Stocks ASC, CCLP, UMH

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."

Ardmore Shipping

Dividend Yield: 9.90%

Ardmore Shipping

(NYSE:

ASC

) shares currently have a dividend yield of 9.90%.

Ardmore Shipping Corporation engages in the seaborne transportation of petroleum products and chemicals through product and chemical tankers worldwide. As of December 31, 2014, the company operated 14 vessels, as well as had 10 vessels under construction. The company has a P/E ratio of 19.86.

The average volume for Ardmore Shipping has been 297,800 shares per day over the past 30 days. Ardmore Shipping has a market cap of $326.6 million and is part of the transportation industry. Shares are up 4.6% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Ardmore Shipping

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:

  • ASC's very impressive revenue growth greatly exceeded the industry average of 36.8%. Since the same quarter one year prior, revenues leaped by 150.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • This stock has managed to rise its share value by 20.63% over the past twelve months. 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, ARDMORE SHIPPING CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The debt-to-equity ratio of 1.12 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, ASC's quick ratio is somewhat strong at 1.45, demonstrating the ability to handle short-term liquidity needs.

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CSI Compressco

Dividend Yield: 14.20%

CSI Compressco

(NASDAQ:

CCLP

) shares currently have a dividend yield of 14.20%.

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 94,800 shares per day over the past 30 days. CSI Compressco has a market cap of $468.3 million and is part of the energy industry. Shares are up 7.5% year-to-date as of the close of trading on Friday.

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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 increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, poor profit margins and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 30.8%. Since the same quarter one year prior, revenues rose by 34.4%. Growth in the company's revenue appears to have helped boost 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 Energy Equipment & Services industry. The net income increased by 162.2% when compared to the same quarter one year prior, rising from -$2.60 million to $1.62 million.
  • CSI COMPRESSCO LP reported significant earnings per share improvement 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, CSI COMPRESSCO LP reported lower earnings of $0.61 versus $1.11 in the prior year. For the next year, the market is expecting a contraction of 84.4% in earnings ($0.10 versus $0.61).
  • CCLP's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 38.17%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • The gross profit margin for CSI COMPRESSCO LP is currently lower than what is desirable, coming in at 33.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.25% trails that of the industry average.

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UMH Properties

Dividend Yield: 7.70%

UMH Properties

(NYSE:

UMH

) shares currently have a dividend yield of 7.70%.

UMH Properties, Inc. (UMH) is a real estate investment trust. The firm engages in the ownership and operation of manufactured home communities. It leases manufactured home spaces to private manufactured home owners, as well as leases homes to residents. The company has a P/E ratio of 62.47.

The average volume for UMH Properties has been 71,000 shares per day over the past 30 days. UMH Properties has a market cap of $253.1 million and is part of the real estate industry. Shares are down 1.6% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

UMH Properties

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • UMH's revenue growth has slightly outpaced the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 15.4%. 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 Real Estate Investment Trusts (REITs) industry. The net income increased by 66.6% when compared to the same quarter one year prior, rising from $0.63 million to $1.05 million.
  • The gross profit margin for UMH PROPERTIES INC is currently lower than what is desirable, coming in at 30.89%. Regardless of UMH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, UMH's net profit margin of 4.46% is significantly lower than the industry average.
  • Net operating cash flow has decreased to $3.76 million or 42.69% 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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