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: 10.30%

Ferrellgas Partners (NYSE: FGP) shares currently have a dividend yield of 10.30%.

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 60.72.

The average volume for Ferrellgas Partners has been 246,900 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 16.3% 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.
  • FGP, with its decline in revenue, underperformed when compared the industry average of 3.3%. 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.
  • Powered by its strong earnings growth of 48.93% and other important driving factors, this stock has surged by 39.94% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • 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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Anworth Mortgage Asset Corporation

Dividend Yield: 9.90%

Anworth Mortgage Asset Corporation (NYSE: ANH) shares currently have a dividend yield of 9.90%.

Anworth Mortgage Asset Corporation operates as a real estate investment trust in the United States. The company primarily invests in the United States agency mortgage-backed securities, which are securities representing obligations guaranteed by the U.S. The company has a P/E ratio of 9.04.

The average volume for Anworth Mortgage Asset Corporation has been 1,253,200 shares per day over the past 30 days. Anworth Mortgage Asset Corporation has a market cap of $870.8 million and is part of the real estate industry. Shares are up 6.1% year to date as of the close of trading on Monday.

TheStreet Ratings rates Anworth Mortgage Asset Corporation as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and expanding profit margins. 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:
  • Net operating cash flow has significantly increased by 116.21% to $14.32 million when compared to the same quarter last year. In addition, ANWORTH MTG ASSET CORP has also vastly surpassed the industry average cash flow growth rate of 38.58%.
  • The gross profit margin for ANWORTH MTG ASSET CORP is currently very high, coming in at 92.10%. Regardless of ANH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ANH's net profit margin of 47.00% significantly outperformed against the industry.
  • 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 Real Estate Investment Trusts (REITs) industry average. The net income has decreased by 17.8% when compared to the same quarter one year ago, dropping from $28.39 million to $23.33 million.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ANWORTH MTG ASSET CORP's return on equity is below that of both the industry average and the S&P 500.

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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.

The average volume for LRR Energy has been 191,300 shares per day over the past 30 days. LRR Energy has a market cap of $274.9 million and is part of the energy industry. Shares are up 1.6% year to date as of the close of trading on Monday.

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 1.3%. 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% is in-line with 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 26.66%.
  • 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.

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: 10.20%

Vector Group (NYSE: VGR) shares currently have a dividend yield of 10.20%.

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 44.97.

The average volume for Vector Group has been 443,800 shares per day over the past 30 days. Vector Group has a market cap of $1.4 billion and is part of the tobacco industry. Shares are up 5.3% year to date as of the close of trading on Monday.

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, good cash flow from operations and expanding profit margins. 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.
  • Net operating cash flow has significantly increased by 52.95% to -$13.16 million when compared to the same quarter last year. In addition, VECTOR GROUP LTD has also vastly surpassed the industry average cash flow growth rate of -20.20%.
  • 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.
  • 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.
  • In its most recent trading session, VGR 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. 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.

NutriSystem

Dividend Yield: 9.40%

NutriSystem (NASDAQ: NTRI) shares currently have a dividend yield of 9.40%.

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 295,200 shares per day over the past 30 days. NutriSystem has a market cap of $212.9 million and is part of the diversified services industry. Shares are down 8.8% year to date as of the close of trading on Monday.

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.

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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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