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."

Regency Energy Partners

Dividend Yield: 7.00%

Regency Energy Partners (NYSE: RGP) shares currently have a dividend yield of 7.00%.

Regency Energy Partners LP engages in gathering, treating, processing, compressing, and transporting natural gas and natural gas liquids (NGLs). The company operates in Gathering and Processing, Natural Gas Transportation, NGL Services, and Contract Services segments. The company has a P/E ratio of 200.77.

The average volume for Regency Energy Partners has been 557,800 shares per day over the past 30 days. Regency Energy Partners has a market cap of $4.5 billion and is part of the energy industry. Shares are up 17.9% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Regency Energy Partners as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $71.08 million or 44.05% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 0.00%.
  • RGP, with its decline in revenue, slightly underperformed the industry average of 0.7%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 169.1% when compared to the same quarter one year ago, falling from $13.52 million to -$9.35 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, REGENCY ENERGY PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.

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Barrick Gold Corporation

Dividend Yield: 4.10%

Barrick Gold Corporation (NYSE: ABX) shares currently have a dividend yield of 4.10%.

Barrick Gold Corporation engages in the production and sale of gold and copper. It is also involved in exploration and mine development activities.

The average volume for Barrick Gold Corporation has been 16,133,000 shares per day over the past 30 days. Barrick Gold Corporation has a market cap of $19.7 billion and is part of the metals & mining industry. Shares are down 45.1% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Barrick Gold Corporation as a hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • ABX, with its decline in revenue, slightly underperformed the industry average of 4.5%. Since the same quarter one year prior, revenues slightly dropped by 5.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ABX's debt-to-equity ratio of 0.66 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.86 is weak.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income has decreased by 17.7% when compared to the same quarter one year ago, dropping from $1,029.00 million to $847.00 million.
  • BARRICK GOLD CORP's earnings per share declined by 17.5% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, BARRICK GOLD CORP swung to a loss, reporting -$0.66 versus $4.48 in the prior year.
  • 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 Metals & Mining industry and the overall market on the basis of return on equity, BARRICK GOLD CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.

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Resource Capital Corporation

Dividend Yield: 12.10%

Resource Capital Corporation (NYSE: RSO) shares currently have a dividend yield of 12.10%.

Resource Capital Corp., a specialty finance company, purchases and manages a diversified portfolio of commercial real estate-related assets and commercial finance assets in the United States. The company has a P/E ratio of 9.28.

The average volume for Resource Capital Corporation has been 1,714,900 shares per day over the past 30 days. Resource Capital Corporation has a market cap of $820.7 million and is part of the real estate industry. Shares are up 15.4% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Resource Capital Corporation as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. 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:
  • The revenue growth greatly exceeded the industry average of 16.4%. Since the same quarter one year prior, revenues rose by 48.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, RESOURCE CAPITAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The gross profit margin for RESOURCE CAPITAL CORP is rather high; currently it is at 52.10%. Regardless of RSO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, RSO's net profit margin of 29.89% compares favorably to the industry average.
  • Net operating cash flow has significantly decreased to -$14.05 million or 215.23% 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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Northstar Realty Finance Corporation

Dividend Yield: 7.20%

Northstar Realty Finance Corporation (NYSE: NRF) shares currently have a dividend yield of 7.20%.

NorthStar Realty Finance Corp., a real estate investment trust (REIT), operates as a commercial real estate (CRE) investment and asset management company in the United States.

The average volume for Northstar Realty Finance Corporation has been 3,593,000 shares per day over the past 30 days. Northstar Realty Finance Corporation has a market cap of $2.0 billion and is part of the real estate industry. Shares are up 38.1% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Northstar Realty Finance Corporation as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. 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:
  • NRF's very impressive revenue growth greatly exceeded the industry average of 16.4%. Since the same quarter one year prior, revenues leaped by 51.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 75.29% and other important driving factors, this stock has surged by 71.90% 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.
  • The gross profit margin for NORTHSTAR REALTY FINANCE CP is rather high; currently it is at 68.30%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -9.47% is in-line with the industry average.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, NORTHSTAR REALTY FINANCE CP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $14.68 million or 41.36% 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.

Sun Communities

Dividend Yield: 4.90%

Sun Communities (NYSE: SUI) shares currently have a dividend yield of 4.90%.

Sun Communities, Inc. operates as a real estate investment trust (REIT). It owns, operates, and develops manufactured housing communities in the midwestern, southern, and southeastern United States. The company has a P/E ratio of 319.69.

The average volume for Sun Communities has been 244,800 shares per day over the past 30 days. Sun Communities has a market cap of $1.8 billion and is part of the real estate industry. Shares are up 24.7% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Sun Communities as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • SUI's revenue growth has slightly outpaced the industry average of 16.4%. Since the same quarter one year prior, revenues rose by 23.7%. 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 35.0% when compared to the same quarter one year prior, rising from $5.38 million to $7.26 million.
  • SUN COMMUNITIES INC's earnings per share declined by 9.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SUN COMMUNITIES INC turned its bottom line around by earning $0.20 versus -$0.05 in the prior year. This year, the market expects an improvement in earnings ($0.50 versus $0.20).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, SUN COMMUNITIES INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for SUN COMMUNITIES INC is currently lower than what is desirable, coming in at 27.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.99% significantly trails 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.

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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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