3 Hold-Rated Dividend Stocks: TUP, CY, EEP - TheStreet

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: 4.80%

Tupperware Brands

(NYSE:

TUP

) shares currently have a dividend yield of 4.80%.

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 13.52.

The average volume for Tupperware Brands has been 688,500 shares per day over the past 30 days. Tupperware Brands has a market cap of $2.8 billion and is part of the consumer non-durables industry. Shares are down 8.9% year-to-date as of the close of trading on Monday.

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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, expanding profit margins and good cash flow from operations. 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.
  • The gross profit margin for TUPPERWARE BRANDS CORP is rather high; currently it is at 69.88%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 6.94% is above that of the industry average.
  • Net operating cash flow has slightly increased to $48.10 million or 6.65% when compared to the same quarter last year. Despite an increase in cash flow of 6.65%, TUPPERWARE BRANDS CORP is still growing at a significantly lower rate than the industry average of 166.40%.
  • TUP has underperformed the S&P 500 Index, declining 15.33% 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 7.18 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.44, which clearly demonstrates the inability to cover short-term cash needs.

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Cypress Semiconductor

Dividend Yield: 4.50%

Cypress Semiconductor

(NASDAQ:

CY

) shares currently have a dividend yield of 4.50%.

Cypress Semiconductor Corporation provides mixed-signal programmable solutions, semiconductor memories, and integrated semiconductor solutions worldwide.

The average volume for Cypress Semiconductor has been 7,618,400 shares per day over the past 30 days. Cypress Semiconductor has a market cap of $3.3 billion and is part of the electronics industry. Shares are down 29.3% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Cypress Semiconductor

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:

  • CY's very impressive revenue growth greatly exceeded the industry average of 10.9%. Since the same quarter one year prior, revenues leaped by 147.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 136.1% when compared to the same quarter one year prior, rising from $12.84 million to $30.31 million.
  • CY has underperformed the S&P 500 Index, declining 5.10% from its price level of one year ago.
  • 42.95% is the gross profit margin for CYPRESS SEMICONDUCTOR CORP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, CY's net profit margin of 6.53% is significantly lower than the industry average.
  • 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 Semiconductors & Semiconductor Equipment industry and the overall market, CYPRESS SEMICONDUCTOR CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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Enbridge Energy Partners

Dividend Yield: 9.30%

Enbridge Energy Partners

(NYSE:

EEP

) shares currently have a dividend yield of 9.30%.

Enbridge Energy Partners, L.P. owns and operates crude oil and liquid petroleum transportation and storage assets; and natural gas gathering, treating, processing, transportation, and marketing assets in the United States. It operates through two segments, Liquids and Natural Gas. The company has a P/E ratio of 60.98.

The average volume for Enbridge Energy Partners has been 1,005,300 shares per day over the past 30 days. Enbridge Energy Partners has a market cap of $6.6 billion and is part of the energy industry. Shares are down 37.3% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Enbridge Energy Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and generally higher debt management risk.

Highlights from the ratings report include:

  • ENBRIDGE ENERGY PRTNRS -LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ENBRIDGE ENERGY PRTNRS -LP turned its bottom line around by earning $0.67 versus -$0.38 in the prior year. This year, the market expects an improvement in earnings ($0.90 versus $0.67).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 128.0% when compared to the same quarter one year prior, rising from $46.80 million to $106.70 million.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 36.8%. Since the same quarter one year prior, revenues fell by 34.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • EEP's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 35.38%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, EEP is still more expensive than most of the other companies in its industry.
  • The debt-to-equity ratio of 1.39 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.17, which clearly demonstrates the inability to cover short-term cash needs.

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