What To Hold: 3 Hold-Rated Dividend Stocks ATAX, WHF, OZM
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."
America First Multifamily Investors
Dividend Yield: 8.70%
America First Multifamily Investors
(NASDAQ:
) shares currently have a dividend yield of 8.70%.
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 22.19.
The average volume for America First Multifamily Investors has been 175,500 shares per day over the past 30 days. America First Multifamily Investors has a market cap of $347.7 million and is part of the real estate industry. Shares are up 9.7% year-to-date as of the close of trading on Monday.
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 6.1%. 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.
- The gross profit margin for AMERICA FIRST MULTIFAMILY-LP is currently very high, coming in at 78.12%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.93% is above that of the industry average.
- 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.
Dividend Yield: 11.50%
(NASDAQ:
) shares currently have a dividend yield of 11.50%.
Whitehorse Finance, LLC is a business development company. The company has a P/E ratio of 8.37.
The average volume for WhiteHorse Finance has been 40,400 shares per day over the past 30 days. WhiteHorse Finance has a market cap of $185.6 million and is part of the financial services industry. Shares are up 6.9% year-to-date as of the close of trading on Monday.
TheStreet Ratings rates
WhiteHorse Finance
as a
. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, 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, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 510.38% to $20.81 million when compared to the same quarter last year. In addition, WHITEHORSE FINANCE INC has also vastly surpassed the industry average cash flow growth rate of -6.01%.
- The gross profit margin for WHITEHORSE FINANCE INC is rather high; currently it is at 58.80%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, WHF's net profit margin of 49.24% significantly outperformed against the industry.
- 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 Capital Markets industry and the overall market on the basis of return on equity, WHITEHORSE FINANCE INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, WHF has underperformed the S&P 500 Index, declining 15.84% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- 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 Capital Markets industry. The net income has decreased by 24.2% when compared to the same quarter one year ago, dropping from $6.02 million to $4.56 million.
- You can view the full WhiteHorse Finance Ratings Report.
Och-Ziff Capital Management Group
Dividend Yield: 15.30%
Och-Ziff Capital Management Group
(NYSE:
) shares currently have a dividend yield of 15.30%.
Och-Ziff Capital Management Group LLC is a publicly owned hedge fund sponsor. The firm provides investment advisory services for its clients. It invests in equity markets across the world. The firm makes its investments in alternative markets across the world. The company has a P/E ratio of 15.40.
The average volume for Och-Ziff Capital Management Group has been 694,800 shares per day over the past 30 days. Och-Ziff Capital Management Group has a market cap of $2.2 billion and is part of the financial services industry. Shares are up 6.8% year-to-date as of the close of trading on Monday.
TheStreet Ratings rates
Och-Ziff Capital Management Group
as a
. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- OZM, with its decline in revenue, underperformed when compared the industry average of 12.8%. Since the same quarter one year prior, revenues fell by 37.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 45.69% is the gross profit margin for OCH-ZIFF CAPITAL MGMT LLC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, OZM's net profit margin of 12.31% is significantly lower than the industry average.
- OCH-ZIFF CAPITAL MGMT LLC has experienced 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, OCH-ZIFF CAPITAL MGMT LLC reported lower earnings of $0.75 versus $1.50 in the prior year. This year, the market expects an improvement in earnings ($1.46 versus $0.75).
- The share price of OCH-ZIFF CAPITAL MGMT LLC has not done very well: it is down 6.81% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- 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 Capital Markets industry. The net income has significantly decreased by 57.5% when compared to the same quarter one year ago, falling from $199.06 million to $84.68 million.
- You can view the full Och-Ziff Capital Management Group Ratings Report.
Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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