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."

CommonWealth REIT

Dividend Yield: 4.30%

CommonWealth REIT (NYSE: CWH) shares currently have a dividend yield of 4.30%.

CommonWealth REIT is a real estate investment trust launched and managed by Reit Management & Research LLC. The fund invests in the real estate markets of the United States. It seeks to invest in office buildings, industrial buildings, and leased industrial land. The company has a P/E ratio of 65.71. Currently there are no analysts that rate CommonWealth REIT a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for CommonWealth REIT has been 3,637,400 shares per day over the past 30 days. CommonWealth REIT has a market cap of $2.7 billion and is part of the real estate industry. Shares are up 39% year to date as of the close of trading on Friday.

TheStreet Ratings rates CommonWealth REIT as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and poor profit margins.

Highlights from the ratings report include:
  • This stock has managed to rise its share value by 23.58% over the past twelve months. 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.
  • COMMONWEALTH REIT has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, COMMONWEALTH REIT increased its bottom line by earning $0.36 versus $0.19 in the prior year.
  • The gross profit margin for COMMONWEALTH REIT is currently lower than what is desirable, coming in at 33.30%. Regardless of CWH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CWH's net profit margin of -57.04% significantly underperformed when compared to the industry average.
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 1127.3% when compared to the same quarter one year ago, falling from $14.87 million to -$152.78 million.

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Canadian Imperial Bank of Commerce

Dividend Yield: 4.70%

Canadian Imperial Bank of Commerce (NYSE: CM) shares currently have a dividend yield of 4.70%.

Canadian Imperial Bank of Commerce provides various financial products and services to individual, small business, commercial, corporate, and institutional customers in Canada and internationally. The company has a P/E ratio of 10.00. Currently there are 4 analysts that rate Canadian Imperial Bank of Commerce a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Canadian Imperial Bank of Commerce has been 152,500 shares per day over the past 30 days. Canadian Imperial Bank of Commerce has a market cap of $31.5 billion and is part of the banking industry. Shares are down 3.7% year to date as of the close of trading on Friday.

TheStreet Ratings rates Canadian Imperial Bank of Commerce as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow.

Highlights from the ratings report include:
  • 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. In comparison to the other companies in the Commercial Banks industry and the overall market, CANADIAN IMPERIAL BANK's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • The gross profit margin for CANADIAN IMPERIAL BANK is currently very high, coming in at 76.10%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.68% is above that of the industry average.
  • CANADIAN IMPERIAL BANK' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CANADIAN IMPERIAL BANK increased its bottom line by earning $7.85 versus $7.30 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 Commercial Banks industry average, but is greater than that of the S&P 500. The net income has decreased by 4.3% when compared to the same quarter one year ago, dropping from $832.00 million to $796.00 million.
  • Net operating cash flow has decreased to $1,455.00 million or 39.07% 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.

Pengrowth Energy

Dividend Yield: 9.70%

Pengrowth Energy (NYSE: PGH) shares currently have a dividend yield of 9.70%.

Pengrowth Energy Corporation engages in the acquisition, exploration, development, and production of oil and natural gas reserves in Canada. The company has a P/E ratio of 161.00. Currently there are 3 analysts that rate Pengrowth Energy a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Pengrowth Energy has been 2,494,300 shares per day over the past 30 days. Pengrowth Energy has a market cap of $2.5 billion and is part of the energy industry. Shares are down 2.2% year to date as of the close of trading on Friday.

TheStreet Ratings rates Pengrowth Energy as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:
  • PGH's very impressive revenue growth greatly exceeded the industry average of 1.3%. Since the same quarter one year prior, revenues leaped by 68.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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 151.7% when compared to the same quarter one year prior, rising from -$8.97 million to $4.64 million.
  • Net operating cash flow has slightly increased to $207.68 million or 1.53% when compared to the same quarter last year. Despite an increase in cash flow, PENGROWTH ENERGY CORP's cash flow growth rate is still lower than the industry average growth rate of 20.25%.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, PENGROWTH ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • PGH'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 47.16%, 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. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, PGH is still more expensive than most of the other companies 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.

EV Energy Partner

Dividend Yield: 5.90%

EV Energy Partner (NASDAQ: EVEP) shares currently have a dividend yield of 5.90%.

EV Energy Partners, L.P. engages in the acquisition, development, and production of oil and natural gas properties in the United States. Currently there are 7 analysts that rate EV Energy Partner a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for EV Energy Partner has been 316,600 shares per day over the past 30 days. EV Energy Partner has a market cap of $2.2 billion and is part of the energy industry. Shares are down 6.8% year to date as of the close of trading on Friday.

TheStreet Ratings rates EV Energy Partner as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, 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 deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.3%. Since the same quarter one year prior, revenues rose by 12.9%. 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 slightly increased to $34.48 million or 3.82% when compared to the same quarter last year. Despite an increase in cash flow, EV ENERGY PARTNERS LP's cash flow growth rate is still lower than the industry average growth rate of 20.25%.
  • 39.90% is the gross profit margin for EV ENERGY PARTNERS LP 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, EVEP's net profit margin of -13.08% significantly underperformed when compared to the industry average.
  • 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 202.3% when compared to the same quarter one year ago, falling from $9.66 million to -$9.88 million.
  • 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, EV 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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