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."

Ferrellgas Partners

Dividend Yield: 10.80%

Ferrellgas Partners (NYSE: FGP) shares currently have a dividend yield of 10.80%.

Ferrellgas Partners, L.P. engages in the distribution and sale of propane, and related equipment and supplies primarily in the United States. It transports propane to propane distribution locations, tanks on customers' premises, or to portable propane tanks delivered to retailers. The company has a P/E ratio of 57.91. Currently there are no analysts that rate Ferrellgas Partners a buy, 5 analysts rate it a sell, and none rate it a hold.

The average volume for Ferrellgas Partners has been 252,700 shares per day over the past 30 days. Ferrellgas Partners has a market cap of $1.5 billion and is part of the energy industry. Shares are up 10.3% year to date as of the close of trading on Monday.

TheStreet Ratings rates Ferrellgas 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 good cash flow from operations. 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:
  • FERRELLGAS PARTNERS -LP has improved earnings per share by 48.9% 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, FERRELLGAS PARTNERS -LP continued to lose money by earning -$0.14 versus -$0.58 in the prior year. This year, the market expects an improvement in earnings ($0.60 versus -$0.14).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Gas Utilities industry. The net income increased by 60.0% when compared to the same quarter one year prior, rising from $36.37 million to $58.21 million.
  • 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. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • FGP, with its decline in revenue, underperformed when compared the industry average of 3.5%. Since the same quarter one year prior, revenues fell by 20.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for FERRELLGAS PARTNERS -LP is rather low; currently it is at 19.60%. Regardless of FGP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, FGP's net profit margin of 8.83% compares favorably to the industry average.

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Golub Capital BDC Inc. BDC

Dividend Yield: 7.80%

Golub Capital BDC Inc. BDC (NASDAQ: GBDC) shares currently have a dividend yield of 7.80%.

Golub Capital BDC, Inc. is a business development company and operates as an externally managed closed-end non-diversified management investment company. It invests in debt and minority equity investments in middle-market companies that are, in most cases, sponsored by private equity investors. The company has a P/E ratio of 12.14. Currently there are 2 analysts that rate Golub Capital BDC Inc. BDC a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Golub Capital BDC Inc. BDC has been 265,200 shares per day over the past 30 days. Golub Capital BDC Inc. BDC has a market cap of $546.6 million and is part of the financial services industry. Shares are up 2.8% year to date as of the close of trading on Monday.

TheStreet Ratings rates Golub Capital BDC Inc. BDC as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in stock price during the past year and good cash flow from operations. 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 11.3%. Since the same quarter one year prior, revenues rose by 48.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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 gross profit margin for GOLUB CAPITAL BDC INC is rather high; currently it is at 67.20%. Regardless of GBDC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GBDC's net profit margin of 50.82% significantly outperformed against the industry.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Capital Markets industry average, but is greater than that of the S&P 500. The net income increased by 50.5% when compared to the same quarter one year prior, rising from $6.19 million to $9.32 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. When compared to other companies in the Capital Markets industry and the overall market, GOLUB CAPITAL BDC INC's return on equity is below that of both the industry average and the S&P 500.

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Gladstone Commercial Corporation

Dividend Yield: 7.70%

Gladstone Commercial Corporation (NASDAQ: GOOD) shares currently have a dividend yield of 7.70%.

Gladstone Commercial Corporation operates as a real estate investment trust (REIT) in the United States. It engages in investing in and owning net leased industrial and commercial real properties, and making long-term industrial and commercial mortgage loans. Currently there are 2 analysts that rate Gladstone Commercial Corporation a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Gladstone Commercial Corporation has been 39,100 shares per day over the past 30 days. Gladstone Commercial Corporation has a market cap of $220.2 million and is part of the real estate industry. Shares are up 9.5% year to date as of the close of trading on Monday.

TheStreet Ratings rates Gladstone Commercial Corporation as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and solid stock price performance. 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:
  • GOOD's revenue growth has slightly outpaced the industry average of 16.4%. Since the same quarter one year prior, revenues rose by 20.2%. 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.
  • 49.50% is the gross profit margin for GLADSTONE COMMERCIAL CORP which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, GOOD's net profit margin of 4.45% significantly trails the industry average.
  • 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. 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.
  • 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, GLADSTONE COMMERCIAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $4.78 million or 9.18% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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Rhino Resource Partners

Dividend Yield: 13.30%

Rhino Resource Partners (NYSE: RNO) shares currently have a dividend yield of 13.30%.

Rhino Resource Partners LP, together with its subsidiaries, produces, processes, and sells various grades of steam and metallurgical coal from surface and underground mines in the United States. The company has a P/E ratio of 9.46. Currently there is 1 analyst that rates Rhino Resource Partners a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Rhino Resource Partners has been 54,400 shares per day over the past 30 days. Rhino Resource Partners has a market cap of $206.3 million and is part of the metals & mining industry. Shares are down 2.2% year to date as of the close of trading on Monday.

TheStreet Ratings rates Rhino Resource Partners as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, feeble growth in the company's earnings per share and poor profit margins.

Highlights from the ratings report include:
  • RNO, with its decline in revenue, underperformed when compared the industry average of 1.7%. Since the same quarter one year prior, revenues fell by 14.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • RHINO RESOURCE PARTNERS LP's earnings per share declined by 26.7% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, RHINO RESOURCE PARTNERS LP's EPS of $1.42 remained unchanged from the prior years' EPS of $1.42. For the next year, the market is expecting a contraction of 43.7% in earnings ($0.80 versus $1.42).
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has significantly decreased by 26.2% when compared to the same quarter one year ago, falling from $12.71 million to $9.38 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.

China Ceramics

Dividend Yield: 9.30%

China Ceramics (NASDAQ: CCCL) shares currently have a dividend yield of 9.30%.

China Ceramics Co., Ltd. engages in the manufacture and sale of ceramic tiles for exterior siding and interior flooring, and design in residential and commercial buildings in the People's Republic of China and internationally. The company has a P/E ratio of 0.90. Currently there are no analysts that rate China Ceramics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for China Ceramics has been 94,700 shares per day over the past 30 days. China Ceramics has a market cap of $43.9 million and is part of the financial services industry. Shares are down 3.3% year to date as of the close of trading on Monday.

TheStreet Ratings rates China Ceramics 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, attractive 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 poor profit margins.

Highlights from the ratings report include:
  • CCCL's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CCCL has a quick ratio of 1.92, which demonstrates the ability of the company to cover short-term liquidity needs.
  • CCCL, with its decline in revenue, slightly underperformed the industry average of 5.8%. Since the same quarter one year prior, revenues slightly dropped by 3.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • CHINA CERAMICS CO LTD's earnings per share declined by 13.4% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CHINA CERAMICS CO LTD reported lower earnings of $2.48 versus $2.93 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Building Products industry average, but is greater than that of the S&P 500. The net income has decreased by 2.5% when compared to the same quarter one year ago, dropping from $12.16 million to $11.85 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.

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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