What To Hold: 3 Hold-Rated Dividend Stocks ETR, COH, CSG

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."

Entergy

Dividend Yield: 5.20%

Entergy

(NYSE:

ETR

) shares currently have a dividend yield of 5.20%.

Entergy Corporation, together with its subsidiaries, engages in the electric power production and retail electric distribution operations in the United States. It operates in two segments, Utility and Entergy Wholesale Commodities.

The average volume for Entergy has been 1,475,900 shares per day over the past 30 days. Entergy has a market cap of $11.7 billion and is part of the utilities industry. Shares are down 25.5% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Entergy

as a

hold

. The company's strongest point has been its expanding profit margins. At the same time, however, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • ENTERGY CORP 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. 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, ENTERGY CORP increased its bottom line by earning $5.22 versus $3.98 in the prior year. This year, the market expects an improvement in earnings ($5.95 versus $5.22).
  • ETR, with its decline in revenue, slightly underperformed the industry average of 0.1%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The share price of ENTERGY CORP has not done very well: it is down 19.39% 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.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Electric Utilities industry and the overall market, ENTERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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 Electric Utilities industry. The net income has significantly decreased by 405.7% when compared to the same quarter one year ago, falling from $234.92 million to -$718.23 million.

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Coach

Dividend Yield: 4.50%

Coach

(NYSE:

COH

) shares currently have a dividend yield of 4.50%.

Coach, Inc. provides luxury accessories and lifestyle collections in the United States. The company has a P/E ratio of 21.75.

The average volume for Coach has been 4,024,400 shares per day over the past 30 days. Coach has a market cap of $8.3 billion and is part of the consumer non-durables industry. Shares are down 22.2% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Coach

as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:

  • Despite currently having a low debt-to-equity ratio of 0.36, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that COH's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.03 is high and demonstrates strong liquidity.
  • The gross profit margin for COACH INC is currently very high, coming in at 72.97%. Regardless of COH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.35% trails the industry average.
  • Net operating cash flow has significantly decreased to $8.00 million or 94.24% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 Textiles, Apparel & Luxury Goods industry average. The net income has decreased by 19.1% when compared to the same quarter one year ago, dropping from $119.10 million to $96.40 million.

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Chambers Street Properties

Dividend Yield: 7.10%

Chambers Street Properties

(NYSE:

CSG

) shares currently have a dividend yield of 7.10%.

Chambers Street Properties is an equity real estate investment trust. The firm invests in the real estate markets of United States, United Kingdom, and Germany. It focuses on acquiring, owning, and operating the properties. The firm invests in industrial and office properties. The company has a P/E ratio of 119.67.

The average volume for Chambers Street Properties has been 1,600,200 shares per day over the past 30 days. Chambers Street Properties has a market cap of $1.7 billion and is part of the real estate industry. Shares are down 11.2% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Chambers Street Properties

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. 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:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.1%. Since the same quarter one year prior, revenues slightly increased by 4.3%. 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.
  • 37.21% is the gross profit margin for CHAMBERS STREET PROPERTIES which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CSG's net profit margin of 7.94% significantly trails the industry average.
  • CHAMBERS STREET PROPERTIES 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. 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, CHAMBERS STREET PROPERTIES turned its bottom line around by earning $0.08 versus -$0.02 in the prior year. This year, the market expects an improvement in earnings ($0.12 versus $0.08).
  • 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, CHAMBERS STREET PROPERTIES's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of CHAMBERS STREET PROPERTIES has not done very well: it is down 12.23% 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. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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