What To Hold: 3 Hold-Rated Dividend Stocks SPH, EVA, WSR
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."
Dividend Yield: 10.40%
(NYSE:
) shares currently have a dividend yield of 10.40%.
Suburban Propane Partners, L.P., through its subsidiaries, engages in the retail marketing and distribution of propane, fuel oil, and refined fuels. The company has a P/E ratio of 53.41.
The average volume for Suburban Propane Partners has been 231,800 shares per day over the past 30 days. Suburban Propane Partners has a market cap of $2.1 billion and is part of the utilities industry. Shares are up 41.6% year-to-date as of the close of trading on Friday.
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TheStreet Ratings rates
Suburban Propane Partners
as a
. The company's strengths can be seen in multiple areas, such as its expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- 39.48% is the gross profit margin for SUBURBAN PROPANE PRTNRS -LP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.76% significantly outperformed against the industry average.
- SPH, with its decline in revenue, underperformed when compared the industry average of 20.0%. Since the same quarter one year prior, revenues fell by 32.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 Gas Utilities industry and the overall market on the basis of return on equity, SUBURBAN PROPANE PRTNRS -LP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Net operating cash flow has decreased to $70.14 million or 44.48% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full Suburban Propane Partners Ratings Report.
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Dividend Yield: 9.20%
(NYSE:
) shares currently have a dividend yield of 9.20%.
Enviva Partners, LP produces and supplies utility-grade wood pellets to power generators. Enviva Partners GP, LLC operates as the general partner of the company. Enviva Partners, LP was founded in 2013 and is based in Bethesda, Maryland. The company has a P/E ratio of 28.09.
The average volume for Enviva Partners has been 108,200 shares per day over the past 30 days. Enviva Partners has a market cap of $549.4 million and is part of the materials & construction industry. Shares are up 19.6% year-to-date as of the close of trading on Friday.
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TheStreet Ratings rates
Enviva Partners
as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
Highlights from the ratings report include:
- Powered by its strong earnings growth of 172.72% and other important driving factors, this stock has surged by 37.48% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although EVA had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- ENVIVA PARTNERS LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.48 versus $0.97).
- Despite the weak revenue results, EVA has outperformed against the industry average of 24.0%. Since the same quarter one year prior, revenues slightly dropped by 7.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- EVA's debt-to-equity ratio of 0.65 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.97 is weak.
- The gross profit margin for ENVIVA PARTNERS LP is rather low; currently it is at 19.83%. Regardless of EVA's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, EVA's net profit margin of 7.09% compares favorably to the industry average.
- You can view the full Enviva Partners Ratings Report.
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Dividend Yield: 7.20%
(NYSE:
) shares currently have a dividend yield of 7.20%.
WhiteStone REIT is a Maryland REIT engaged in owning and operating commercial properties in culturally diverse markets in major metropolitan areas. The company has a P/E ratio of 44.03.
The average volume for Whitestone REIT has been 200,200 shares per day over the past 30 days. Whitestone REIT has a market cap of $434.4 million and is part of the real estate industry. Shares are up 32.3% year-to-date as of the close of trading on Friday.
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TheStreet Ratings rates
Whitestone REIT
as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.
Highlights from the ratings report include:
- WSR's revenue growth has slightly outpaced the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 20.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- 46.97% is the gross profit margin for WHITESTONE REIT 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, WSR's net profit margin of 19.57% significantly trails the industry average.
- 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, WHITESTONE REIT's return on equity is below that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $5.68 million or 24.43% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full Whitestone REIT Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.