What To Hold: 3 Hold-Rated Dividend Stocks TUP, APAM, FTR

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."

Tupperware Brands

Dividend Yield: 4.70%

Tupperware Brands

(NYSE:

TUP

) shares currently have a dividend yield of 4.70%.

Tupperware Brands Corporation operates as a direct-to-consumer marketer of various products across a range of brands and categories worldwide. The company has a P/E ratio of 13.87.

The average volume for Tupperware Brands has been 709,500 shares per day over the past 30 days. Tupperware Brands has a market cap of $2.9 billion and is part of the consumer non-durables industry. Shares are down 7.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Tupperware Brands

as a

hold

. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Household Durables industry and the overall market, TUPPERWARE BRANDS CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has slightly increased to $48.10 million or 6.65% when compared to the same quarter last year. In addition, TUPPERWARE BRANDS CORP has also vastly surpassed the industry average cash flow growth rate of -144.79%.
  • TUPPERWARE BRANDS CORP has improved earnings per share by 14.3% 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, TUPPERWARE BRANDS CORP reported lower earnings of $4.21 versus $5.18 in the prior year. This year, the market expects an improvement in earnings ($4.42 versus $4.21).
  • TUP has underperformed the S&P 500 Index, declining 6.66% 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 debt-to-equity ratio is very high at 7.32 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.

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Artisan Partners Asset Management

Dividend Yield: 6.10%

Artisan Partners Asset Management

(NYSE:

APAM

) shares currently have a dividend yield of 6.10%.

Artisan Partners Asset Management Inc is publicly owned investment manager. It provides its services to pension and profit sharing plans, trusts, endowments, foundations, charitable organizations, government entities, private funds and non-U.S. funds, as well as mutual funds, non-U.S. The company has a P/E ratio of 19.23.

The average volume for Artisan Partners Asset Management has been 382,600 shares per day over the past 30 days. Artisan Partners Asset Management has a market cap of $1.5 billion and is part of the financial services industry. Shares are down 23.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Artisan Partners Asset Management

as a

hold

. The company's strengths can be seen in multiple areas, such as its notable return on equity and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Capital Markets industry and the overall market, ARTISAN PARTNERS ASSET MGMT's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • ARTISAN PARTNERS ASSET MGMT's earnings per share declined by 22.8% 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, ARTISAN PARTNERS ASSET MGMT continued to lose money by earning -$0.72 versus -$2.02 in the prior year. This year, the market expects an improvement in earnings ($2.70 versus -$0.72).
  • 36.14% is the gross profit margin for ARTISAN PARTNERS ASSET MGMT which we consider to be strong. Regardless of APAM'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 9.27% trails the industry average.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income has decreased by 10.0% when compared to the same quarter one year ago, dropping from $20.44 million to $18.40 million.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, APAM has underperformed the S&P 500 Index, declining 16.89% from its price level of one year ago. 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.

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Frontier Communications

Dividend Yield: 8.90%

Frontier Communications

(NASDAQ:

FTR

) shares currently have a dividend yield of 8.90%.

Frontier Communications Corporation, a communications company, provides regulated and unregulated voice, data, and video services to residential, business, and wholesale customers in the United States. The company has a P/E ratio of 79.00.

The average volume for Frontier Communications has been 19,607,600 shares per day over the past 30 days. Frontier Communications has a market cap of $5.5 billion and is part of the telecommunications industry. Shares are down 29.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Frontier Communications

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust 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 generally higher debt management risk.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 2.6%. Since the same quarter one year prior, revenues rose by 24.8%. 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 $345.00 million or 14.63% when compared to the same quarter last year. In addition, FRONTIER COMMUNICATIONS CORP has also modestly surpassed the industry average cash flow growth rate of 7.84%.
  • 41.43% is the gross profit margin for FRONTIER COMMUNICATIONS CORP which we consider to be strong. Regardless of FTR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FTR's net profit margin of -0.98% significantly underperformed when compared to 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 133.3% when compared to the same quarter one year ago, falling from $41.99 million to -$14.00 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. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, FRONTIER COMMUNICATIONS CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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