What To Hold: 3 Hold-Rated Dividend Stocks ATAX, MITT, MCC
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
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."
America First Multifamily Investors
Dividend Yield: 8.80%
America First Multifamily Investors
(NASDAQ:
) shares currently have a dividend yield of 8.80%.
America First Multifamily Investors, L.P. acquires, holds, sells, and deals in a portfolio of mortgage revenue bonds that have been issued to provide construction and/or permanent financing of multifamily residential apartments. The company has a P/E ratio of 22.68.
The average volume for America First Multifamily Investors has been 157,900 shares per day over the past 30 days. America First Multifamily Investors has a market cap of $341.6 million and is part of the real estate industry. Shares are up 7.8% year-to-date as of the close of trading on Wednesday.
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TheStreet Ratings rates
America First Multifamily Investors
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, 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, deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 5.7%. Since the same quarter one year prior, revenues rose by 21.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- AMERICA FIRST MULTIFAMILY-LP has improved earnings per share by 20.0% 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, AMERICA FIRST MULTIFAMILY-LP increased its bottom line by earning $0.34 versus $0.09 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus $0.34).
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Thrifts & Mortgage Finance industry average. The net income has decreased by 3.0% when compared to the same quarter one year ago, dropping from $3.41 million to $3.31 million.
- 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 Thrifts & Mortgage Finance industry and the overall market, AMERICA FIRST MULTIFAMILY-LP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full America First Multifamily Investors Ratings Report.
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Dividend Yield: 13.10%
(NYSE:
) shares currently have a dividend yield of 13.10%.
AG Mortgage Investment Trust, Inc., a real estate investment trust, focuses on investing, acquiring, and managing a portfolio of residential mortgage assets, other real estate-related securities, and financial assets. The company has a P/E ratio of 5.45.
The average volume for AG Mortgage Investment has been 208,900 shares per day over the past 30 days. AG Mortgage Investment has a market cap of $521.8 million and is part of the real estate industry. Shares are down 0.8% year-to-date as of the close of trading on Wednesday.
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TheStreet Ratings rates
AG Mortgage Investment
as a
. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- The gross profit margin for AG MORTGAGE INVESTMENT TRUST is currently very high, coming in at 78.65%. Regardless of MITT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MITT's net profit margin of 47.46% significantly outperformed against the industry.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, AG MORTGAGE INVESTMENT TRUST has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- AG MORTGAGE INVESTMENT TRUST's earnings per share declined by 16.7% 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, AG MORTGAGE INVESTMENT TRUST turned its bottom line around by earning $3.38 versus -$1.60 in the prior year. For the next year, the market is expecting a contraction of 25.4% in earnings ($2.52 versus $3.38).
- 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 Real Estate Investment Trusts (REITs) industry. The net income has decreased by 14.2% when compared to the same quarter one year ago, dropping from $16.89 million to $14.50 million.
- You can view the full AG Mortgage Investment Ratings Report.
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Dividend Yield: 12.70%
(NYSE:
) shares currently have a dividend yield of 12.70%.
Medley Capital Corporation is a business development company. The fund seeks to invest in privately negotiated debt and equity securities of small and middle market companies. The company has a P/E ratio of 8.62.
The average volume for Medley Capital has been 626,400 shares per day over the past 30 days. Medley Capital has a market cap of $556.8 million and is part of the financial services industry. Shares are up 2.9% year-to-date as of the close of trading on Wednesday.
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TheStreet Ratings rates
Medley Capital
as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 13.1%. Since the same quarter one year prior, revenues rose by 25.8%. 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 -$42.35 million or 22.43% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 6.53%.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, MEDLEY CAPITAL CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 30.44%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 186.11% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- You can view the full Medley Capital Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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