5 Hold-Rated Dividend Stocks

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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 and 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 5 stocks with substantial yields, that ultimately, we have rated "Hold."

Niska Gas Storage Partners

Dividend Yield: 11.85%

Niska Gas Storage Partners (NYSE: NKA) shares currently have a dividend yield of 11.85%.

Niska Gas Storage Partners LLC owns and operates natural gas storage assets in North America. Currently there are no analysts that rate Niska Gas Storage Partners a buy, 3 analysts rate it a sell, and 3 rate it a hold.

The average volume for Niska Gas Storage Partners has been 100,600 shares per day over the past 30 days. Niska Gas Storage Partners has a market cap of $407.4 million and is part of the utilities industry. Shares are up 8.3% year to date as of the close of trading on Friday.

TheStreet Ratings rates Niska Gas Storage Partners as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:
  • 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. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 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 104.9% when compared to the same quarter one year prior, rising from -$213.63 million to $10.42 million.
  • NISKA GAS STORAGE PARTNERS reported significant earnings per share improvement 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, NISKA GAS STORAGE PARTNERS swung to a loss, reporting -$2.38 versus $0.84 in the prior year. This year, the market expects an improvement in earnings (-$0.51 versus -$2.38).
  • Net operating cash flow has decreased to $59.82 million or 47.95% 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 debt-to-equity ratio of 1.28 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 0.32, which clearly demonstrates the inability to cover short-term cash needs.

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Stonemor Partners

Dividend Yield: 9.23%

Stonemor Partners (NYSE: STON) shares currently have a dividend yield of 9.23%.

StoneMor Partners L.P., together with its subsidiaries, engages in the ownership and operation of cemeteries in the southeast, northeast, and west regions of the United States. It offers funeral and cemetery products and services in the death care industry. Currently there is 1 analyst that rates Stonemor Partners a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Stonemor Partners has been 109,500 shares per day over the past 30 days. Stonemor Partners has a market cap of $499.4 million and is part of the diversified services industry. Shares are up 22.7% year to date as of the close of trading on Friday.

TheStreet Ratings rates Stonemor Partners as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 14.5%. Since the same quarter one year prior, revenues slightly increased by 3.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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 Diversified Consumer Services industry. The net income increased by 575.8% when compared to the same quarter one year prior, rising from -$0.22 million to $1.06 million.
  • STONEMOR PARTNERS LP reported significant earnings per share improvement 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, STONEMOR PARTNERS LP reported poor results of -$0.53 versus -$0.06 in the prior year. This year, the market expects an improvement in earnings (-$0.01 versus -$0.53).
  • 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. Compared to other companies in the Diversified Consumer Services industry and the overall market, STONEMOR PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Currently the debt-to-equity ratio of 1.58 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Regardless of the company's weak debt-to-equity ratio, STON has managed to keep a strong quick ratio of 1.85, which demonstrates the ability to cover short-term cash needs.

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BGC Partners

Dividend Yield: 11.24%

BGC Partners (NASDAQ: BGCP) shares currently have a dividend yield of 11.24%.

BGC Partners, Inc. operates as a brokerage company, primarily servicing the wholesale financial markets. The company has a P/E ratio of 6.19. Currently there are 2 analysts that rate BGC Partners a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for BGC Partners has been 1,526,400 shares per day over the past 30 days. BGC Partners has a market cap of $500.0 million and is part of the financial services industry. Shares are up 23.4% year to date as of the close of trading on Friday.

TheStreet Ratings rates BGC Partners as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • BGCP's revenue growth has slightly outpaced the industry average of 12.3%. Since the same quarter one year prior, revenues rose by 21.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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 Capital Markets industry. The net income increased by 268.9% when compared to the same quarter one year prior, rising from $3.84 million to $14.17 million.
  • 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. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, BGC PARTNERS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • BGCP'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 39.86%, 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, BGCP is still more expensive than most of the other companies in its industry.
  • The gross profit margin for BGC PARTNERS INC is currently extremely low, coming in at 1.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.29% significantly trails the industry average.

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New Mountain Finance

Dividend Yield: 8.93%

New Mountain Finance (NYSE: NMFC) shares currently have a dividend yield of 8.93%.

New Mountain Finance Corporation operates as a closed-end, non-diversified management investment company. Currently there are 3 analysts that rate New Mountain Finance a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for New Mountain Finance has been 222,400 shares per day over the past 30 days. New Mountain Finance has a market cap of $315.1 million and is part of the conglomerates industry. Shares are up 2.2% year to date as of the close of trading on Friday.

TheStreet Ratings rates New Mountain Finance as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and solid stock price performance. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 12.3%. Since the same quarter one year prior, revenues rose by 44.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Capital Markets industry and the overall market, NEW MOUNTAIN FINANCE CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for NEW MOUNTAIN FINANCE CORP is rather high; currently it is at 57.60%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, NMFC's net profit margin of 102.27% significantly outperformed against the industry.
  • NEW MOUNTAIN FINANCE CORP reported significant earnings per share improvement 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, NEW MOUNTAIN FINANCE CORP reported lower earnings of $1.02 versus $1.12 in the prior year. This year, the market expects an improvement in earnings ($1.34 versus $1.02).

New From TheStreet: Jim Cramer's Protégé, Dave Peltier, only buys dividend stocks that have the potential for a 3% to 4% yield and 10% growth. Get his best picks for less than $50/year.

Compressco Partners

Dividend Yield: 8.89%

Compressco Partners (NASDAQ: GSJK) shares currently have a dividend yield of 8.89%.

Compressco Partners, L.P. provides wellhead compression-based production enhancement services to natural gas and oil exploration and production companies. The company's services primarily consist of wellhead compression, related liquids separation, gas metering, and vapor recovery services. The company has a P/E ratio of 20.31. Currently there is 1 analyst that rates Compressco Partners a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Compressco Partners has been 15,100 shares per day over the past 30 days. Compressco Partners has a market cap of $175.0 million and is part of the energy industry. Shares are up 13% year to date as of the close of trading on Friday.

TheStreet Ratings rates Compressco Partners as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 8.1%. Since the same quarter one year prior, revenues rose by 23.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 45.60% is the gross profit margin for COMPRESSCO PARTNERS 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 15.11% is above that of the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • COMPRESSCO PARTNERS 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, COMPRESSCO PARTNERS LP increased its bottom line by earning $1.05 versus $0.47 in the prior year. This year, the market expects an improvement in earnings ($1.32 versus $1.05).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 56.9% when compared to the same quarter one year prior, rising from $3.12 million to $4.90 million.

New From TheStreet: Jim Cramer's Protégé, Dave Peltier, only buys dividend stocks that have the potential for a 3% to 4% yield and 10% growth. Get his best picks for less than $50/year.

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Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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