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."

BioMed Realty

Dividend Yield: 4.30%

BioMed Realty (NYSE: BMR) shares currently have a dividend yield of 4.30%.

BioMed Realty Trust, Inc. operates as a real estate investment trust (REIT) that focuses on providing real estate to the life science industry in the United States. The company has a P/E ratio of 289.86. Currently there are 5 analysts that rate BioMed Realty a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for BioMed Realty has been 1,327,500 shares per day over the past 30 days. BioMed Realty has a market cap of $3.4 billion and is part of the real estate industry. Shares are up 13.6% year to date as of the close of trading on Friday.

TheStreet Ratings rates BioMed Realty 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 solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • BMR's revenue growth has slightly outpaced the industry average of 16.4%. Since the same quarter one year prior, revenues rose by 24.3%. 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 significantly increased by 55.55% to $62.20 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 32.95%.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, BIOMED REALTY TRUST INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for BIOMED REALTY TRUST INC is currently lower than what is desirable, coming in at 25.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.90% significantly trails the industry average.

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STMicroelectronics

Dividend Yield: 4.40%

STMicroelectronics (NYSE: STM) shares currently have a dividend yield of 4.40%.

STMicroelectronics N.V., an independent semiconductor company, engages in the design, development, manufacture, and marketing of a range of semiconductor integrated circuits and discrete devices. Currently there are 3 analysts that rate STMicroelectronics a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for STMicroelectronics has been 1,582,200 shares per day over the past 30 days. STMicroelectronics has a market cap of $6.8 billion and is part of the electronics industry. Shares are up 5.5% year to date as of the close of trading on Friday.

TheStreet Ratings rates STMicroelectronics as a hold. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.
  • STM's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.91 is somewhat weak and could be cause for future problems.
  • 47.40% is the gross profit margin for STMICROELECTRONICS NV which we consider to be strong. Regardless of STM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, STM's net profit margin of -3.50% significantly underperformed when compared to the industry average.
  • STMICROELECTRONICS NV has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, STMICROELECTRONICS NV reported lower earnings of $0.72 versus $0.91 in the prior year. For the next year, the market is expecting a contraction of 111.1% in earnings (-$0.08 versus $0.72).
  • 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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 118.1% when compared to the same quarter one year ago, falling from $420.00 million to -$76.00 million.

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CYS Investments

Dividend Yield: 10.50%

CYS Investments (NYSE: CYS) shares currently have a dividend yield of 10.50%.

No company description available. The company has a P/E ratio of 4.61. Currently there are 5 analysts that rate CYS Investments a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for CYS Investments has been 2,677,100 shares per day over the past 30 days. CYS Investments has a market cap of $2.1 billion and is part of the real estate industry. Shares are up 2.5% year to date as of the close of trading on Friday.

TheStreet Ratings rates CYS Investments as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income 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 16.4%. Since the same quarter one year prior, revenues rose by 29.1%. 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 CYS INVESTMENTS INC is currently very high, coming in at 94.00%. 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 -50.19% is in-line with the industry average.
  • CYS INVESTMENTS INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, CYS INVESTMENTS INC reported lower earnings of $2.75 versus $3.63 in the prior year. For the next year, the market is expecting a contraction of 52.7% in earnings ($1.30 versus $2.75).
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 190.6% when compared to the same quarter one year ago, falling from $44.09 million to -$39.94 million.

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Newcastle Investment Corporation

Dividend Yield: 7.70%

Newcastle Investment Corporation (NYSE: NCT) shares currently have a dividend yield of 7.70%.

Newcastle Investment Corp. operates as a real estate investment and finance company in the United States. The company has a P/E ratio of 3.90. Currently there are 4 analysts that rate Newcastle Investment Corporation a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Newcastle Investment Corporation has been 5,035,300 shares per day over the past 30 days. Newcastle Investment Corporation has a market cap of $2.9 billion and is part of the real estate industry. Shares are up 33.2% year to date as of the close of trading on Friday.

TheStreet Ratings rates Newcastle Investment Corporation as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and compelling growth in net income. 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:
  • NCT's revenue growth has slightly outpaced the industry average of 16.4%. Since the same quarter one year prior, revenues rose by 19.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 77.77% and other important driving factors, this stock has surged by 84.70% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, NEWCASTLE INVESTMENT CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • NEWCASTLE INVESTMENT 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NEWCASTLE INVESTMENT CORP reported lower earnings of $2.84 versus $3.49 in the prior year. For the next year, the market is expecting a contraction of 60.9% in earnings ($1.11 versus $2.84).

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BreitBurn Energy Partners

Dividend Yield: 9.60%

BreitBurn Energy Partners (NASDAQ: BBEP) shares currently have a dividend yield of 9.60%.

BreitBurn Energy Partners L.P. engages in the acquisition, exploitation, and development of oil and gas properties in the United States. Currently there are 8 analysts that rate BreitBurn Energy Partners a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for BreitBurn Energy Partners has been 870,300 shares per day over the past 30 days. BreitBurn Energy Partners has a market cap of $2.0 billion and is part of the energy industry. Shares are up 8.2% year to date as of the close of trading on Friday.

TheStreet Ratings rates BreitBurn Energy Partners as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:
  • BBEP's very impressive revenue growth greatly exceeded the industry average of 3.0%. Since the same quarter one year prior, revenues leaped by 60.8%. Growth in the company's revenue appears to have helped boost 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 Oil, Gas & Consumable Fuels industry. The net income increased by 66.0% when compared to the same quarter one year prior, rising from -$30.39 million to -$10.33 million.
  • BREITBURN ENERGY 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, BREITBURN ENERGY PARTNERS LP swung to a loss, reporting -$0.60 versus $1.61 in the prior year. This year, the market expects an improvement in earnings ($0.74 versus -$0.60).
  • BBEP's debt-to-equity ratio of 0.69 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that BBEP's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.64 is low and demonstrates weak liquidity.
  • 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, BREITBURN ENERGY PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.

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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