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."

America First Tax Exempt Investors L.P

Dividend Yield: 7.10%

America First Tax Exempt Investors L.P (NASDAQ: ATAX) shares currently have a dividend yield of 7.10%.

America First Tax Exempt Investors, L.P. engages in acquiring, holding, selling, and dealing with a portfolio of federally tax-exempt mortgage revenue bonds, which have been issued to provide construction and/or permanent financing of multifamily residential apartments. The company has a P/E ratio of 77.78. Currently there are no analysts that rate America First Tax Exempt Investors L.P a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for America First Tax Exempt Investors L.P has been 91,500 shares per day over the past 30 days. America First Tax Exempt Investors L.P has a market cap of $299.4 million and is part of the real estate industry. Shares are up 5.4% year to date as of the close of trading on Friday.

TheStreet Ratings rates America First Tax Exempt Investors L.P as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.6%. Since the same quarter one year prior, revenues rose by 11.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • This stock has managed to rise its share value by 27.50% over the past twelve months. Although ATAX had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • The gross profit margin for AMERICA FIRST TAX EX IVS -LP is rather high; currently it is at 63.90%. Regardless of ATAX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ATAX's net profit margin of 31.02% significantly outperformed against the industry.
  • Net operating cash flow has significantly decreased to -$0.53 million or 113.17% when compared to the same quarter last year. Despite a decrease in cash flow of 113.17%, AMERICA FIRST TAX EX IVS -LP is still significantly exceeding the industry average of -173.46%.
  • 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 Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, AMERICA FIRST TAX EX IVS -LP underperformed against that of the industry average and is significantly less than that of the S&P 500.

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Icahn

Dividend Yield: 7.20%

Icahn (NASDAQ: IEP) shares currently have a dividend yield of 7.20%.

Icahn Enterprises L.P. engages in the investment, automotive, gaming, railcar, food packaging, metals, real estate, and home fashion businesses in the United States and internationally. Its Investment segment provides investment advisory, and administrative and back office services. The company has a P/E ratio of 14.75.

The average volume for Icahn has been 138,900 shares per day over the past 30 days. Icahn has a market cap of $6.0 billion and is part of the real estate industry. Shares are up 24.2% year to date as of the close of trading on Friday.

TheStreet Ratings rates Icahn as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:
  • IEP's very impressive revenue growth greatly exceeded the industry average of 0.7%. Since the same quarter one year prior, revenues leaped by 89.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 273.79% and other important driving factors, this stock has surged by 33.62% 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.
  • ICAHN ENTERPRISES LP 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. During the past fiscal year, ICAHN ENTERPRISES LP increased its bottom line by earning $8.07 versus $2.14 in the prior year.
  • Net operating cash flow has significantly decreased to -$39.00 million or 108.12% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Currently the debt-to-equity ratio of 1.83 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated.

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Full Circle Capital Corp BDC

Dividend Yield: 11.90%

Full Circle Capital Corp BDC (NASDAQ: FULL) shares currently have a dividend yield of 11.90%.

Full Circle Capital Corporation is a business development company and operates as an externally managed non-diversified closed-end management investment company. The company has a P/E ratio of 38.75. Currently there are no analysts that rate Full Circle Capital Corp BDC a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Full Circle Capital Corp BDC has been 73,300 shares per day over the past 30 days. Full Circle Capital Corp BDC has a market cap of $58.7 million and is part of the financial services industry. Shares are up 3.9% year to date as of the close of trading on Friday.

TheStreet Ratings rates Full Circle Capital Corp BDC as a hold. The company's strongest point has been its very decent return on equity which we feel should persist. At the same time, however, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue fell significantly faster than the industry average of 10.8%. Since the same quarter one year prior, revenues fell by 22.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • FULL CIRCLE CAPITAL 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 year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FULL CIRCLE CAPITAL CORP reported lower earnings of $0.44 versus $0.46 in the prior year. This year, the market expects an improvement in earnings ($0.81 versus $0.44).
  • In its most recent trading session, FULL 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. 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.
  • The gross profit margin for FULL CIRCLE CAPITAL CORP is currently extremely low, coming in at 1.30%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -35.51% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$1.80 million or 146.56% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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CorEnergy Infrastructure

Dividend Yield: 7.30%

CorEnergy Infrastructure (NYSE: CORR) shares currently have a dividend yield of 7.30%.

CorEnergy Infrastructure Trust, Inc. is a close ended equity mutual fund launched and managed by Tortoise Capital Advisors L.L.C. It is co-managed by Kenmont Investments Management, L.P. The fund invests in the public equity markets of the United States. The company has a P/E ratio of 5.13. Currently there is 1 analyst that rates CorEnergy Infrastructure a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for CorEnergy Infrastructure has been 211,100 shares per day over the past 30 days. CorEnergy Infrastructure has a market cap of $166.1 million and is part of the utilities industry. Shares are up 15.3% year to date as of the close of trading on Friday.

TheStreet Ratings rates CorEnergy Infrastructure as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Capital Markets industry average. The net income increased by 76.8% when compared to the same quarter one year prior, rising from -$1.57 million to -$0.36 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.8%. Since the same quarter one year prior, revenues slightly increased by 4.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 Capital Markets industry and the overall market on the basis of return on equity, CORENERGY INFRASTRUCTURE TR has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • CORENERGY INFRASTRUCTURE TR 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, CORENERGY INFRASTRUCTURE TR increased its bottom line by earning $1.35 versus $0.31 in the prior year. For the next year, the market is expecting a contraction of 79.3% in earnings ($0.28 versus $1.35).
  • CORR has underperformed the S&P 500 Index, declining 22.53% 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.

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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