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."

Stonemor Partners

Dividend Yield: 9.60%

Stonemor Partners (NYSE: STON) shares currently have a dividend yield of 9.60%.

StoneMor Partners L.P., together with its subsidiaries, engages in the ownership and operation of cemeteries in the United States. It operates through Cemetery Operations Southeast, Cemetery Operations Northeast, Cemetery Operations West, and Funeral Homes segments. 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 115,800 shares per day over the past 30 days. Stonemor Partners has a market cap of $483.3 million and is part of the diversified services industry. Shares are up 14.5% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Stonemor Partners as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and generally higher debt management risk.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 11.6%. Since the same quarter one year prior, revenues slightly increased by 1.0%. 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 119.61% to $1.10 million when compared to the same quarter last year. In addition, STONEMOR PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -73.75%.
  • STONEMOR PARTNERS LP's earnings per share declined by 25.0% 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 continued to lose money by earning -$0.16 versus -$0.53 in the prior year. This year, the market expects an improvement in earnings (-$0.15 versus -$0.16).
  • The change in net income from the same quarter one year ago has exceeded that of the Diversified Consumer Services industry average, but is less than that of the S&P 500. The net income has significantly decreased by 27.2% when compared to the same quarter one year ago, falling from -$3.09 million to -$3.94 million.
  • Currently the debt-to-equity ratio of 1.89 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 1.81, which demonstrates the ability to cover short-term cash needs.

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Mid-Con Energy Partners

Dividend Yield: 8.50%

Mid-Con Energy Partners (NASDAQ: MCEP) shares currently have a dividend yield of 8.50%.

Mid-Con Energy Partners, LP engages in the acquisition, exploitation, development, and production of oil and natural gas properties in North America. The company has a P/E ratio of 14.38. Currently there are 5 analysts that rate Mid-Con Energy Partners a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Mid-Con Energy Partners has been 82,800 shares per day over the past 30 days. Mid-Con Energy Partners has a market cap of $448.1 million and is part of the energy industry. Shares are up 24.6% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Mid-Con Energy Partners as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth 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 generally higher debt management risk.

Highlights from the ratings report include:
  • Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MID-CON ENERGY PARTNERS -LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • MCEP's very impressive revenue growth greatly exceeded the industry average of 1.7%. Since the same quarter one year prior, revenues leaped by 269.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has slightly increased to $9.93 million or 3.90% when compared to the same quarter last year. Despite an increase in cash flow, MID-CON ENERGY PARTNERS -LP's cash flow growth rate is still lower than the industry average growth rate of 20.23%.
  • In its most recent trading session, MCEP 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.
  • The debt-to-equity ratio of 1.08 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, MCEP's quick ratio is somewhat strong at 1.46, demonstrating the ability to handle short-term liquidity needs.

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.

LRR Energy

Dividend Yield: 11.10%

LRR Energy (NYSE: LRE) shares currently have a dividend yield of 11.10%.

LRR Energy, L.P., through its subsidiary, LRE Operating, LLC, engages in the acquisition, exploitation, development, and operation of oil and natural gas properties in North America. The company has a P/E ratio of 31.72. Currently there are 4 analysts that rate LRR Energy a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for LRR Energy has been 180,600 shares per day over the past 30 days. LRR Energy has a market cap of $273.2 million and is part of the energy industry. Shares are down 0.3% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates LRR Energy as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • LRE's revenue growth has slightly outpaced the industry average of 1.7%. Since the same quarter one year prior, revenues slightly increased by 0.4%. 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 LRR ENERGY LP is currently very high, coming in at 73.30%. 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 -1.86% trails the industry average.
  • Net operating cash flow has increased to $17.63 million or 10.00% when compared to the same quarter last year. Despite an increase in cash flow, LRR ENERGY LP's cash flow growth rate is still lower than the industry average growth rate of 20.23%.
  • LRR ENERGY LP 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 year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, LRR ENERGY LP reported lower earnings of $0.00 versus $2.42 in the prior year. This year, the market expects an increase in earnings to $0.48 from $0.00.
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 110.7% when compared to the same quarter one year ago, falling from $4.67 million to -$0.50 million.

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Horizon Technology Finance Corp BDC

Dividend Yield: 9.80%

Horizon Technology Finance Corp BDC (NASDAQ: HRZN) shares currently have a dividend yield of 9.80%.

Horizon Technology Finance Corporation, a specialty finance company, lends to and invests in development-stage companies in the United States. The company has a P/E ratio of 9.99. Currently there is 1 analyst that rates Horizon Technology Finance Corp BDC a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Horizon Technology Finance Corp BDC has been 82,700 shares per day over the past 30 days. Horizon Technology Finance Corp BDC has a market cap of $134.8 million and is part of the financial services industry. Shares are down 8.6% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Horizon Technology Finance Corp BDC as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 11.3%. Since the same quarter one year prior, revenues rose by 28.4%. 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 HORIZON TECHNOLOGY FINANCE is rather high; currently it is at 62.30%. Regardless of HRZN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HRZN's net profit margin of -55.56% significantly underperformed when compared to the industry average.
  • HORIZON TECHNOLOGY FINANCE 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, HORIZON TECHNOLOGY FINANCE reported lower earnings of $0.56 versus $1.44 in the prior year. This year, the market expects an improvement in earnings ($1.42 versus $0.56).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, HORIZON TECHNOLOGY FINANCE underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The share price of HORIZON TECHNOLOGY FINANCE has not done very well: it is down 10.87% 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, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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.

Dominion Resources Black Warrior

Dividend Yield: 12.60%

Dominion Resources Black Warrior (NYSE: DOM) shares currently have a dividend yield of 12.60%.

Dominion Resources Black Warrior Trust operates as a grantor trust in the United States. The company has a P/E ratio of 9.41. Currently there are no analysts that rate Dominion Resources Black Warrior a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Dominion Resources Black Warrior has been 58,300 shares per day over the past 30 days. Dominion Resources Black Warrior has a market cap of $39.9 million and is part of the financial services industry. Shares are up 67.5% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Dominion Resources Black Warrior 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, expanding profit margins and notable return on equity. 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 a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • DOM has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 92.70, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for DOMINION RES BLACK WARRIOR is currently very high, coming in at 100.00%. DOM has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, DOM's net profit margin of 81.10% significantly outperformed against the industry.
  • The revenue fell significantly faster than the industry average of 1.7%. Since the same quarter one year prior, revenues fell by 36.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • DOMINION RES BLACK WARRIOR's earnings per share declined by 39.1% 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, DOMINION RES BLACK WARRIOR reported lower earnings of $0.54 versus $0.93 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 41.8% when compared to the same quarter one year ago, falling from $1.84 million to $1.07 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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