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."

China Ceramics

Dividend Yield: 9.30%

China Ceramics (NASDAQ: CCCL) shares currently have a dividend yield of 9.30%.

China Ceramics Co., Ltd. engages in the manufacture and sale of ceramic tiles for exterior siding and interior flooring, and design in residential and commercial buildings in the People's Republic of China and internationally. The company has a P/E ratio of 1.12.

The average volume for China Ceramics has been 89,800 shares per day over the past 30 days. China Ceramics has a market cap of $43.7 million and is part of the materials & construction industry. Shares are down 1.9% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates China Ceramics 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, attractive valuation levels 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 poor profit margins.

Highlights from the ratings report include:
  • CCCL's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.08, which clearly demonstrates the ability to cover short-term cash needs.
  • The revenue fell significantly faster than the industry average of 5.4%. Since the same quarter one year prior, revenues fell by 38.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for CHINA CERAMICS CO LTD is rather low; currently it is at 19.50%. It has decreased significantly from the same period last year.
  • Net operating cash flow has significantly decreased to -$4.94 million or 145.63% 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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Anworth Mortgage Asset Corporation

Dividend Yield: 9.50%

Anworth Mortgage Asset Corporation (NYSE: ANH) shares currently have a dividend yield of 9.50%.

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 10.18.

The average volume for Anworth Mortgage Asset Corporation has been 1,229,900 shares per day over the past 30 days. Anworth Mortgage Asset Corporation has a market cap of $906.7 million and is part of the real estate industry. Shares are up 6.6% year to date as of the close of trading on Wednesday.

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 36.21%.
  • 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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Memorial Production Partners

Dividend Yield: 10.60%

Memorial Production Partners (NASDAQ: MEMP) shares currently have a dividend yield of 10.60%.

Memorial Production Partners LP, through its subsidiary, Memorial Production Operating LLC, engages in the acquisition, development, exploitation, and production of oil and natural gas properties. The company has a P/E ratio of 1926.00.

The average volume for Memorial Production Partners has been 508,300 shares per day over the past 30 days. Memorial Production Partners has a market cap of $557.2 million and is part of the energy industry. Shares are up 6.1% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Memorial Production Partners as a hold. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Compared to its price level of one year ago, MEMP is up 6.23% to its most recent closing price of 19.76. Looking ahead, our view is that this company's fundamentals should 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.
  • The gross profit margin for MEMORIAL PRODUCTION PRTRS LP is rather high; currently it is at 61.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.19% significantly outperformed against the industry average.
  • MEMP, with its decline in revenue, slightly underperformed the industry average of 1.3%. Since the same quarter one year prior, revenues slightly dropped by 4.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The debt-to-equity ratio of 1.15 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, MEMP has managed to keep a strong quick ratio of 1.63, which demonstrates the ability to cover short-term cash needs.
  • 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 74.7% when compared to the same quarter one year ago, falling from $117.77 million to $29.81 million.

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North European Oil Royalty

Dividend Yield: 9.50%

North European Oil Royalty (NYSE: NRT) shares currently have a dividend yield of 9.50%.

North European Oil Royalty Trust, a grantor trust, holds overriding royalty rights covering gas and oil production in concessions or leases in the Federal Republic of Germany. It holds these rights under contracts with German exploration and development subsidiaries of ExxonMobil Corp. The company has a P/E ratio of 10.30.

The average volume for North European Oil Royalty has been 12,500 shares per day over the past 30 days. North European Oil Royalty has a market cap of $227.2 million and is part of the financial services industry. Shares are up 9.9% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates North European Oil 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:
  • NRT 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.03, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for NORTH EUROPEAN OIL RTY TR is currently very high, coming in at 100.00%. NRT has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, NRT's net profit margin of 94.42% significantly outperformed against the industry.
  • NRT, with its decline in revenue, underperformed when compared the industry average of 0.7%. Since the same quarter one year prior, revenues fell by 11.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • NORTH EUROPEAN OIL RTY TR's earnings per share declined by 9.1% in the most recent quarter compared to 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, NORTH EUROPEAN OIL RTY TR reported lower earnings of $2.46 versus $2.63 in the prior year.
  • 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 the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 10.0% when compared to the same quarter one year ago, dropping from $6.08 million to $5.47 million.

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Mid-Con Energy Partners

Dividend Yield: 8.10%

Mid-Con Energy Partners (NASDAQ: MCEP) shares currently have a dividend yield of 8.10%.

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 15.42.

The average volume for Mid-Con Energy Partners has been 72,600 shares per day over the past 30 days. Mid-Con Energy Partners has a market cap of $480.4 million and is part of the energy industry. Shares are up 29.4% 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 impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

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 0.7%. 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.
  • MID-CON ENERGY PARTNERS -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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MID-CON ENERGY PARTNERS -LP increased its bottom line by earning $1.63 versus $0.51 in the prior year. This year, the market expects an improvement in earnings ($2.11 versus $1.63).
  • 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. 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.
  • 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.

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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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