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."

Mesa Royalty

Dividend Yield: 8.50%

Mesa Royalty (NYSE: MTR) shares currently have a dividend yield of 8.50%.

Mesa Royalty Trust holds net overriding royalty interests in various oil and gas producing properties in the United States. It has interests in properties that are located in the Hugoton field of Kansas; the San Juan Basin field of New Mexico and Colorado; and the Yellow Creek field of Wyoming. The company has a P/E ratio of 12.81.

The average volume for Mesa Royalty has been 4,900 shares per day over the past 30 days. Mesa Royalty has a market cap of $46.1 million and is part of the financial services industry. Shares are up 25.3% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Mesa Royalty 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:
  • MTR 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 9.27, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for MESA ROYALTY TRUST is currently very high, coming in at 100.00%. MTR has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, MTR's net profit margin of 93.48% significantly outperformed against the industry.
  • MTR, with its very weak revenue results, has greatly underperformed against the industry average of 1.3%. Since the same quarter one year prior, revenues plummeted by 64.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • MESA ROYALTY TRUST 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 suffered a declining pattern earnings per share over the past two years. During the past fiscal year, MESA ROYALTY TRUST reported lower earnings of $2.96 versus $3.51 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 66.4% when compared to the same quarter one year ago, falling from $2.05 million to $0.69 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.

Arlington Asset Investment

Dividend Yield: 13.20%

Arlington Asset Investment (NYSE: AI) shares currently have a dividend yield of 13.20%.

Arlington Asset Investment Corp., an investment firm, acquires mortgage-related and other assets. The company has a P/E ratio of 1.42.

The average volume for Arlington Asset Investment has been 310,800 shares per day over the past 30 days. Arlington Asset Investment has a market cap of $333.0 million and is part of the real estate industry. Shares are up 28.6% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Arlington Asset Investment as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and expanding profit margins. 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:
  • AI's very impressive revenue growth greatly exceeded the industry average of 10.8%. Since the same quarter one year prior, revenues leaped by 66.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Capital Markets industry and the overall market, ARLINGTON ASSET INVESTMENT's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • ARLINGTON ASSET INVESTMENT 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ARLINGTON ASSET INVESTMENT increased its bottom line by earning $15.11 versus $1.98 in the prior year. For the next year, the market is expecting a contraction of 73.3% in earnings ($4.03 versus $15.11).
  • Net operating cash flow has decreased to $7.45 million or 16.67% when compared to the same quarter last year. Despite a decrease in cash flow of 16.67%, ARLINGTON ASSET INVESTMENT is still significantly exceeding the industry average of -78.32%.

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.

New York Mortgage

Dividend Yield: 14.60%

New York Mortgage (NASDAQ: NYMT) shares currently have a dividend yield of 14.60%.

New York Mortgage Trust, Inc., a real estate investment trust (REIT), engages in acquiring, investing in, financing, and managing mortgage-related and financial assets in the United States. The company has a P/E ratio of 6.83.

The average volume for New York Mortgage has been 1,242,100 shares per day over the past 30 days. New York Mortgage has a market cap of $366.4 million and is part of the real estate industry. Shares are up 16.8% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates New York Mortgage 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 attractive valuation levels. 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:
  • NYMT's very impressive revenue growth greatly exceeded the industry average of 16.4%. Since the same quarter one year prior, revenues leaped by 1358.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • NEW YORK MORTGAGE TRUST INC 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, NEW YORK MORTGAGE TRUST INC increased its bottom line by earning $1.25 versus $0.55 in the prior year. For the next year, the market is expecting a contraction of 23.2% in earnings ($0.96 versus $1.25).
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, NEW YORK MORTGAGE TRUST INC's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for NEW YORK MORTGAGE TRUST INC is rather low; currently it is at 21.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 18.66% trails that of the industry average.

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.

NutriSystem

Dividend Yield: 9.20%

NutriSystem (NASDAQ: NTRI) shares currently have a dividend yield of 9.20%.

Nutrisystem, Inc., together with its subsidiaries, provides weight management products and services in the United States. The company offers nutritionally balanced weight loss programs designed for women, men, and seniors.

The average volume for NutriSystem has been 302,300 shares per day over the past 30 days. NutriSystem has a market cap of $216.4 million and is part of the diversified services industry. Shares are down 7.4% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates NutriSystem as a hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins 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 weak operating cash flow.

Highlights from the ratings report include:
  • 48.30% is the gross profit margin for NUTRISYSTEM INC which we consider to be strong. 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 -8.04% trails the industry average.
  • NTRI 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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.80 is somewhat weak and could be cause for future problems.
  • The revenue fell significantly faster than the industry average of 25.3%. Since the same quarter one year prior, revenues slightly dropped by 6.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Internet & Catalog Retail industry and the overall market, NUTRISYSTEM INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$12.38 million or 73.21% 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.

Vector Group

Dividend Yield: 9.90%

Vector Group (NYSE: VGR) shares currently have a dividend yield of 9.90%.

Vector Group Ltd., through its subsidiaries, engages in the manufacture and sale of cigarettes in the United States. The company operates in Tobacco and Real Estate segments. The company has a P/E ratio of 46.23.

The average volume for Vector Group has been 459,300 shares per day over the past 30 days. Vector Group has a market cap of $1.5 billion and is part of the tobacco industry. Shares are up 8.5% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Vector Group as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins 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 significantly exceeded that of the S&P 500 and the Tobacco industry. The net income increased by 111.4% when compared to the same quarter one year prior, rising from $7.80 million to $16.49 million.
  • 48.70% is the gross profit margin for VECTOR GROUP LTD 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, VGR's net profit margin of 11.07% significantly trails the industry average.
  • Net operating cash flow has significantly increased by 52.95% to -$13.16 million when compared to the same quarter last year. Despite an increase in cash flow, VECTOR GROUP LTD's cash flow growth rate is still lower than the industry average growth rate of 67.68%.
  • VECTOR GROUP LTD has improved earnings per share by 47.0% in the most recent quarter compared to the same quarter a year ago. 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, VECTOR GROUP LTD reported lower earnings of $0.30 versus $0.82 in the prior year.
  • VGR has underperformed the S&P 500 Index, declining 5.11% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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.
null

If you liked this article you might like

3 Hold-Rated Dividend Stocks: AI, MTR, IRET

3 Hold-Rated Dividend Stocks: AI, MTR, IRET

Ex-Dividend Alert: 3 Stocks Going Ex-Dividend Tomorrow: MTR, IRT, PSEC

Ex-Dividend Alert: 3 Stocks Going Ex-Dividend Tomorrow: MTR, IRT, PSEC

Worst of the Worst: Stay Away From This Awful Energy Royalty Trust

Worst of the Worst: Stay Away From This Awful Energy Royalty Trust

3 Stocks With Upcoming Ex-Dividend Dates: MTR, CINR, STAG

3 Stocks With Upcoming Ex-Dividend Dates: MTR, CINR, STAG

What To Hold: 3 Hold-Rated Dividend Stocks MTR, HEES, TNH

What To Hold: 3 Hold-Rated Dividend Stocks MTR, HEES, TNH