4 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 4 stocks with substantial yields, that ultimately, we have rated "Hold."

Newmont Mining Corporation

Dividend Yield: 4.10%

Newmont Mining Corporation (NYSE: NEM) shares currently have a dividend yield of 4.10%.

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 10.87. 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 7,060,100 shares per day over the past 30 days. Newmont Mining Corporation has a market cap of $20.2 billion and is part of the metals & mining industry. Shares are down 10.1% year to date as of the close of trading on Wednesday.

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 6.3%. 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 -44.14%.
  • NEM has underperformed the S&P 500 Index, declining 22.05% from its price level of one year ago. 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.

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TECO Energy

Dividend Yield: 5.00%

TECO Energy (NYSE: TE) shares currently have a dividend yield of 5.00%.

TECO Energy, Inc., an electric and gas utility holding company, engages in the regulated electric and gas utility operations. The company has a P/E ratio of 15.40. Currently there are no analysts that rate TECO Energy a buy, 1 analyst rates it a sell, and 11 rate it a hold.

The average volume for TECO Energy has been 1,850,800 shares per day over the past 30 days. TECO Energy has a market cap of $3.8 billion and is part of the utilities industry. Shares are up 4.8% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates TECO Energy as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. 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:
  • Net operating cash flow has significantly increased by 80.72% to $149.10 million when compared to the same quarter last year. In addition, TECO ENERGY INC has also vastly surpassed the industry average cash flow growth rate of 12.08%.
  • TE, with its decline in revenue, slightly underperformed the industry average of 3.4%. Since the same quarter one year prior, revenues slightly dropped by 4.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • In its most recent trading session, TE has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • TECO ENERGY INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, TECO ENERGY INC reported lower earnings of $1.13 versus $1.17 in the prior year. For the next year, the market is expecting a contraction of 15.9% in earnings ($0.95 versus $1.13).

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: 7.60%

Northstar Realty Finance Corporation (NYSE: NRF) shares currently have a dividend yield of 7.60%.

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 3,505,800 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 34.9% year to date as of the close of trading on Wednesday.

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 78.71% 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.

BreitBurn Energy Partners

Dividend Yield: 9.30%

BreitBurn Energy Partners (NASDAQ: BBEP) shares currently have a dividend yield of 9.30%.

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 908,100 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 8.8% year to date as of the close of trading on Wednesday.

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 2.9%. 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.

Other helpful dividend tools from TheStreet:

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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