What To Hold: 3 Hold-Rated Dividend Stocks ATAX, WHF, STON
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 22.60.
The average volume for America First Multifamily Investors has been 150,400 shares per day over the past 30 days. America First Multifamily Investors has a market cap of $340.4 million and is part of the real estate industry. Shares are up 8.4% year-to-date as of the close of trading on Friday.
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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 5.5%. 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: 11.40%
(NASDAQ:
) shares currently have a dividend yield of 11.40%.
Whitehorse Finance, LLC is a business development company. The company has a P/E ratio of 8.42.
The average volume for WhiteHorse Finance has been 38,300 shares per day over the past 30 days. WhiteHorse Finance has a market cap of $186.7 million and is part of the financial services industry. Shares are up 8.7% year-to-date as of the close of trading on Friday.
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TheStreet Ratings rates
WhiteHorse Finance
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, 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 a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 13.2%. Since the same quarter one year prior, revenues rose by 27.8%. 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.
- The gross profit margin for WHITEHORSE FINANCE INC is rather high; currently it is at 60.36%. Regardless of WHF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WHF's net profit margin of 32.63% significantly outperformed against the industry.
- WHITEHORSE FINANCE INC's earnings per share declined by 42.9% in the most recent quarter compared to the same quarter a year ago. 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, WHITEHORSE FINANCE INC increased its bottom line by earning $1.32 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($1.34 versus $1.32).
- The share price of WHITEHORSE FINANCE INC has not done very well: it is down 11.45% 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 43.3% when compared to the same quarter one year ago, falling from $6.34 million to $3.59 million.
- You can view the full WhiteHorse Finance Ratings Report.
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Dividend Yield: 8.80%
(NYSE:
) shares currently have a dividend yield of 8.80%.
StoneMor Partners L.P., together with its subsidiaries, owns and operates cemeteries in the United States. It operates through Cemetery Operations-Southeast, Cemetery Operations-Northeast, Cemetery Operations-West, and Funeral Homes segments.
The average volume for Stonemor Partners has been 172,700 shares per day over the past 30 days. Stonemor Partners has a market cap of $834.2 million and is part of the diversified services industry. Shares are up 10% year-to-date as of the close of trading on Friday.
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TheStreet Ratings rates
Stonemor Partners
as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and generally higher debt management risk.
Highlights from the ratings report include:
- STON's revenue growth has slightly outpaced the industry average of 10.3%. Since the same quarter one year prior, revenues rose by 17.3%. 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 where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
- 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 Diversified Consumer Services industry. The net income has significantly decreased by 120.3% when compared to the same quarter one year ago, falling from -$3.54 million to -$7.80 million.
- Net operating cash flow has significantly decreased to -$3.79 million or 108.35% 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 Stonemor Partners Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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