What To Sell: 3 Sell-Rated Dividend Stocks RIGP, TPVG, PGH

These 3 dividend stocks are rated a Sell 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 "Sell."

Transocean Partners

Dividend Yield: 13.20%

Transocean Partners

(NYSE:

RIGP

) shares currently have a dividend yield of 13.20%.

Transocean Partners LLC, together with its subsidiaries, acquires, owns, and operates offshore drilling rigs located in the United States Gulf of Mexico. As of February 17, 2015, the company's fleet consisted of one ultra-deepwater semisubmersible rig and two ultra-deepwater drillships. The company has a P/E ratio of 11.56.

The average volume for Transocean Partners has been 161,500 shares per day over the past 30 days. Transocean Partners has a market cap of $454.3 million and is part of the energy industry. Shares are down 22.6% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Transocean Partners

as a

sell

. The area that we feel has been the company's primary weakness has been its feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The change in net income from the same quarter one year ago has significantly exceeded that of the Energy Equipment & Services industry average, but is less than that of the S&P 500. The net income has significantly decreased by 30.0% when compared to the same quarter one year ago, falling from $50.00 million to $35.00 million.
  • TRANSOCEAN PARTNERS LLC's earnings per share declined by 29.2% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.28 versus $1.25).
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 57.45%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 29.16% compared to the year-earlier quarter.
  • RIGP's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, RIGP has a quick ratio of 2.29, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, TRANSOCEAN PARTNERS LLC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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TriplePoint Venture Growth BDC

Dividend Yield: 13.30%

TriplePoint Venture Growth BDC

(NYSE:

TPVG

) shares currently have a dividend yield of 13.30%.

TriplePoint Venture Growth BDC Corp is a business development company specializing in investments in growth stage. It also provides debt financing to venture growth space companies. The firm seeks to invest in technology and life sciences sector. The company has a P/E ratio of 7.12.

The average volume for TriplePoint Venture Growth BDC has been 89,600 shares per day over the past 30 days. TriplePoint Venture Growth BDC has a market cap of $180.1 million and is part of the financial services industry. Shares are down 26.9% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

TriplePoint Venture Growth BDC

as a

sell

. The area that we feel has been the company's primary weakness has been its generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • TPVG has underperformed the S&P 500 Index, declining 24.97% from its price level of one year ago.
  • The gross profit margin for TRIPLEPOINT VENTURE GWTH BDC is rather high; currently it is at 64.53%. Regardless of TPVG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TPVG's net profit margin of 60.72% significantly outperformed against the industry.
  • Net operating cash flow has improved to $23.84 million from having none in the same quarter last year. Since the company had no net operating cash flow for the prior period, we cannot calculate a percent change in order to compare its growth rate with that of its industry average.
  • Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, TRIPLEPOINT VENTURE GWTH BDC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • TRIPLEPOINT VENTURE GWTH BDC has improved earnings per share by 48.3% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.54 versus $1.24).

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Pengrowth Energy

Dividend Yield: 19.60%

Pengrowth Energy

(NYSE:

PGH

) shares currently have a dividend yield of 19.60%.

Pengrowth Energy Corporation engages in the acquisition, development, exploration, and production of oil and natural gas assets in the Alberta, British Columbia, Saskatchewan, and Nova Scotia provinces in Canada.

The average volume for Pengrowth Energy has been 1,841,600 shares per day over the past 30 days. Pengrowth Energy has a market cap of $503.7 million and is part of the energy industry. Shares are down 68.1% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Pengrowth Energy

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • PENGROWTH ENERGY 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 two years. During the past fiscal year, PENGROWTH ENERGY CORP reported poor results of -$1.09 versus -$0.61 in the prior year.
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 1427.3% when compared to the same quarter one year ago, falling from -$8.80 million to -$134.40 million.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, PENGROWTH ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for PENGROWTH ENERGY CORP is rather low; currently it is at 15.47%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -94.05% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $97.50 million or 10.87% when compared to the same quarter last year. Despite a decrease in cash flow of 10.87%, PENGROWTH ENERGY CORP is in line with the industry average cash flow growth rate of -19.63%.

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