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."

Old Republic International

Dividend Yield: 5.70%

Old Republic International (NYSE: ORI) shares currently have a dividend yield of 5.70%.

Old Republic International Corporation, through its subsidiaries, engages in underwriting insurance products in the United States and Canada. Currently there are 2 analysts that rate Old Republic International a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Old Republic International has been 1,680,600 shares per day over the past 30 days. Old Republic International has a market cap of $3.3 billion and is part of the insurance industry. Shares are up 16.9% year to date as of the close of trading on Monday.

TheStreet Ratings rates Old Republic International as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, solid stock price performance and notable return on equity. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:
  • ORI's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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 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 Insurance industry and the overall market on the basis of return on equity, OLD REPUBLIC INTL CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • 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 Insurance industry. The net income has significantly decreased by 136.6% when compared to the same quarter one year ago, falling from $55.20 million to -$20.20 million.

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Corporate Office Properties

Dividend Yield: 4.10%

Corporate Office Properties (NYSE: OFC) shares currently have a dividend yield of 4.10%.

Owns, manages, leases, acquires and develops suburban office properties located in the Greater Washington DC and other markets. At Dec. 31, 2005, this self-managed real estate investment trust owned 165 operating office properties with 13.7 million rentable square feet and several land parcels. Currently there are 2 analysts that rate Corporate Office Properties a buy, no analysts rate it a sell, and 11 rate it a hold.

The average volume for Corporate Office Properties has been 632,500 shares per day over the past 30 days. Corporate Office Properties has a market cap of $2.2 billion and is part of the real estate industry. Shares are up 7.1% year to date as of the close of trading on Monday.

TheStreet Ratings rates Corporate Office Properties as a hold. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • 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. 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.
  • CORP OFFICE PPTYS TR INC 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, CORP OFFICE PPTYS TR INC continued to lose money by earning -$0.21 versus -$1.32 in the prior year. This year, the market expects an improvement in earnings ($0.82 versus -$0.21).
  • Net operating cash flow has increased to $52.16 million or 10.33% when compared to the same quarter last year. Despite an increase in cash flow, CORP OFFICE PPTYS TR INC's cash flow growth rate is still lower than the industry average growth rate of 32.95%.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, CORP OFFICE PPTYS TR INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CORP OFFICE PPTYS TR INC is currently lower than what is desirable, coming in at 27.20%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, OFC's net profit margin of 13.10% is significantly lower than the industry average.

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.

Newmont Mining Corporation

Dividend Yield: 4.30%

Newmont Mining Corporation (NYSE: NEM) shares currently have a dividend yield of 4.30%.

Newmont Mining Corporation, together with its subsidiaries, engages in the acquisition, exploration, and production of gold and copper properties. The company's assets or operations are located in the United States, Australia, Peru, Indonesia, Ghana, Mexico, and New Zealand. The company has a P/E ratio of 10.50. Currently there are 9 analysts that rate Newmont Mining Corporation a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Newmont Mining Corporation has been 7,048,900 shares per day over the past 30 days. Newmont Mining Corporation has a market cap of $19.5 billion and is part of the metals & mining industry. Shares are down 13.8% year to date as of the close of trading on Monday.

TheStreet Ratings rates Newmont Mining Corporation 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 notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:
  • NEWMONT MINING CORP 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, NEWMONT MINING CORP increased its bottom line by earning $3.78 versus $1.03 in the prior year. This year, the market expects an improvement in earnings ($4.15 versus $3.78).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 165.5% when compared to the same quarter one year prior, rising from -$1,028.00 million to $673.00 million.
  • NEM, with its decline in revenue, slightly underperformed the industry average of 6.5%. Since the same quarter one year prior, revenues fell by 10.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has declined marginally to $842.00 million or 8.67% when compared to the same quarter last year. Despite a decrease in cash flow NEWMONT MINING CORP is still fairing well by exceeding its industry average cash flow growth rate of -44.49%.
  • NEM'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 27.10%, 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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.

Northstar Realty Finance Corporation

Dividend Yield: 7.50%

Northstar Realty Finance Corporation (NYSE: NRF) shares currently have a dividend yield of 7.50%.

NorthStar Realty Finance Corp., a real estate investment trust (REIT), operates as a commercial real estate (CRE) investment and asset management company in the United States. Currently there are 3 analysts that rate Northstar Realty Finance Corporation a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Northstar Realty Finance Corporation has been 3,461,600 shares per day over the past 30 days. Northstar Realty Finance Corporation has a market cap of $1.6 billion and is part of the real estate industry. Shares are up 37.1% year to date as of the close of trading on Monday.

TheStreet Ratings rates Northstar Realty Finance Corporation as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:
  • NRF's very impressive revenue growth greatly exceeded the industry average of 16.4%. Since the same quarter one year prior, revenues leaped by 51.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 75.29% and other important driving factors, this stock has surged by 82.95% 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.
  • The gross profit margin for NORTHSTAR REALTY FINANCE CP is rather high; currently it is at 68.30%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -9.47% is in-line with the industry average.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, NORTHSTAR REALTY FINANCE CP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $14.68 million or 41.36% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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.

Cablevision Systems

Dividend Yield: 4.30%

Cablevision Systems (NYSE: CVC) shares currently have a dividend yield of 4.30%.

Cablevision Systems Corporation provides telecommunications and media services. It operates in two segments, Telecommunications Services and Other. The company has a P/E ratio of 117.33. Currently there are 3 analysts that rate Cablevision Systems a buy, 3 analysts rate it a sell, and 5 rate it a hold.

The average volume for Cablevision Systems has been 3,550,000 shares per day over the past 30 days. Cablevision Systems has a market cap of $3.0 billion and is part of the media industry. Shares are down 4.6% year to date as of the close of trading on Monday.

TheStreet Ratings rates Cablevision Systems as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations 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 feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 92.2% when compared to the same quarter one year prior, rising from $60.63 million to $116.54 million.
  • Net operating cash flow has slightly increased to $533.19 million or 6.88% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.27%.
  • 45.20% is the gross profit margin for CABLEVISION SYS 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, the net profit margin of 7.00% trails the industry average.
  • CABLEVISION SYS CORP 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CABLEVISION SYS CORP reported lower earnings of $0.13 versus $0.84 in the prior year. This year, the market expects an improvement in earnings ($0.46 versus $0.13).
  • The share price of CABLEVISION SYS CORP has not done very well: it is down 6.73% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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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