What To Hold: 3 Hold-Rated Dividend Stocks SXCP, PNNT, GLAD
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."
Dividend Yield: 8.70%
(NYSE:
) shares currently have a dividend yield of 8.70%.
SunCoke Energy Partners, L.P., a master limited partnership, manufactures and sells coke used in the blast furnace production of steel in the United States. The company operates through Domestic Coke and Coke Logistics segments. The company has a P/E ratio of 15.75.
The average volume for SunCoke Energy Partners has been 64,400 shares per day over the past 30 days. SunCoke Energy Partners has a market cap of $586.7 million and is part of the metals & mining industry. Shares are down 9.8% year-to-date as of the close of trading on Wednesday.
TheStreet Ratings rates
SunCoke Energy Partners
as a
. The company's strengths can be seen in multiple areas, such as its increase in net income, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Metals & Mining industry average. The net income increased by 23.7% when compared to the same quarter one year prior, going from $17.30 million to $21.40 million.
- SUNCOKE ENERGY PARTNERS LP's earnings per share improvement from the most recent quarter was slightly positive. 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, SUNCOKE ENERGY PARTNERS LP reported lower earnings of $1.51 versus $1.82 in the prior year. This year, the market expects an improvement in earnings ($1.71 versus $1.51).
- SXCP, with its decline in revenue, slightly underperformed the industry average of 2.5%. Since the same quarter one year prior, revenues slightly dropped by 3.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- SXCP has underperformed the S&P 500 Index, declining 18.27% 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'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 Metals & Mining industry and the overall market on the basis of return on equity, SUNCOKE ENERGY PARTNERS LP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- You can view the full SunCoke Energy Partners Ratings Report.
Pennant Park Investment Corporation
Dividend Yield: 11.50%
Pennant Park Investment Corporation
(NASDAQ:
) shares currently have a dividend yield of 11.50%.
PennantPark Investment Corporation is a publicly listed business development firm specializing in direct and mezzanine investments in middle market companies. It invests in the form of mezzanine debt, senior secured loans, and equity investments. The company has a P/E ratio of 5.86.
The average volume for Pennant Park Investment Corporation has been 725,500 shares per day over the past 30 days. Pennant Park Investment Corporation has a market cap of $730.7 million and is part of the financial services industry. Shares are up 1.3% year-to-date as of the close of trading on Wednesday.
TheStreet Ratings rates
Pennant Park Investment Corporation
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 12.8%. Since the same quarter one year prior, revenues rose by 13.8%. 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 -$61.84 million or 40.57% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.01%.
- The gross profit margin for PENNANTPARK INVESTMENT CORP is rather high; currently it is at 66.30%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -61.07% is in-line with the industry average.
- 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 160.7% when compared to the same quarter one year ago, falling from $39.46 million to -$23.95 million.
- 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. When compared to other companies in the Capital Markets industry and the overall market, PENNANTPARK INVESTMENT CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Pennant Park Investment Corporation Ratings Report.
Dividend Yield: 9.60%
(NASDAQ:
) shares currently have a dividend yield of 9.60%.
Gladstone Capital Corporation is a business development company specializing in investments in debt and equity securities. The company has a P/E ratio of 16.45.
The average volume for Gladstone Capital has been 141,400 shares per day over the past 30 days. Gladstone Capital has a market cap of $183.1 million and is part of the financial services industry. Shares are up 4% year-to-date as of the close of trading on Wednesday.
TheStreet Ratings rates
Gladstone Capital
as a
. 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:
- The revenue growth came in higher than the industry average of 12.8%. Since the same quarter one year prior, revenues slightly increased by 4.0%. 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 GLADSTONE CAPITAL CORP is rather high; currently it is at 65.32%. Regardless of GLAD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GLAD's net profit margin of 3.79% is significantly lower than the industry average.
- GLADSTONE CAPITAL 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. 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, GLADSTONE CAPITAL CORP reported lower earnings of $0.53 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($0.84 versus $0.53).
- Net operating cash flow has significantly decreased to -$42.32 million or 3426.91% 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 share price of GLADSTONE CAPITAL CORP has not done very well: it is down 12.63% 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, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- You can view the full Gladstone Capital Ratings Report.
Other helpful dividend tools from TheStreet:
- Our dividend calendar.
null