5 Hold-Rated Dividend Stocks: CNSL, MCEP, LRE, NTRI, MEMP

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."

Consolidated Communications

Dividend Yield: 8.20%

Consolidated Communications (NASDAQ: CNSL) shares currently have a dividend yield of 8.20%.

Consolidated Communications Holdings, Inc., together with its subsidiaries, provides telecommunications services to residential and business customers in Illinois, Texas, Pennsylvania, California, Kansas, and Missouri. The company has a P/E ratio of 72.35.

The average volume for Consolidated Communications has been 183,400 shares per day over the past 30 days. Consolidated Communications has a market cap of $754.5 million and is part of the telecommunications industry. Shares are up 18.2% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Consolidated Communications as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • CNSL's very impressive revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues leaped by 67.4%. Growth in the company's revenue appears to have helped boost 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 Diversified Telecommunication Services industry. The net income increased by 285.6% when compared to the same quarter one year prior, rising from $1.76 million to $6.78 million.
  • CONSOLIDATED COMM HLDGS INC reported significant earnings per share improvement 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, CONSOLIDATED COMM HLDGS INC reported lower earnings of $0.17 versus $0.88 in the prior year. This year, the market expects an improvement in earnings ($0.79 versus $0.17).
  • 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 Diversified Telecommunication Services industry and the overall market on the basis of return on equity, CONSOLIDATED COMM HLDGS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The debt-to-equity ratio is very high at 9.60 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, CNSL has a quick ratio of 0.55, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

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Mid-Con Energy Partners

Dividend Yield: 7.90%

Mid-Con Energy Partners (NASDAQ: MCEP) shares currently have a dividend yield of 7.90%.

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 14.72.

The average volume for Mid-Con Energy Partners has been 71,100 shares per day over the past 30 days. Mid-Con Energy Partners has a market cap of $492.5 million and is part of the energy industry. Shares are up 37% 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 expanding profit margins. 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 8.8%. Since the same quarter one year prior, revenues leaped by 79.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The strong earnings growth this company has enjoyed -- up -- has apparently played a role in driving up its share price by a solid 25.75%. In addition, the rise in the general market has likely contributed to this stock's strong performance during this past year.Although MCEP had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • Net operating cash flow has slightly increased to $14.97 million or 6.48% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -13.28%.
  • The debt-to-equity ratio of 1.12 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 1.10, demonstrating the ability to handle short-term liquidity needs.

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LRR Energy

Dividend Yield: 12.90%

LRR Energy (NYSE: LRE) shares currently have a dividend yield of 12.90%.

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 average volume for LRR Energy has been 247,900 shares per day over the past 30 days. LRR Energy has a market cap of $291.7 million and is part of the energy industry. Shares are down 13.4% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates LRR Energy 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 and expanding profit margins. 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:
  • LRE's debt-to-equity ratio of 0.86 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. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.69 is very high and demonstrates very strong liquidity.
  • 50.00% is the gross profit margin for LRR ENERGY 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, LRE's net profit margin of -47.27% significantly underperformed when compared to the industry average.
  • Net operating cash flow has decreased to $9.85 million or 36.58% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • 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, LRR ENERGY LP's return on equity significantly trails that of both the industry average and the S&P 500.

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NutriSystem

Dividend Yield: 7.70%

NutriSystem (NASDAQ: NTRI) shares currently have a dividend yield of 7.70%.

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 company has a P/E ratio of 226.75.

The average volume for NutriSystem has been 277,900 shares per day over the past 30 days. NutriSystem has a market cap of $259.7 million and is part of the diversified services industry. Shares are up 11% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates NutriSystem 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 also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.

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 Internet & Catalog Retail industry. The net income increased by 85.7% when compared to the same quarter one year prior, rising from -$4.48 million to -$0.64 million.
  • Net operating cash flow has increased to $22.40 million or 48.60% when compared to the same quarter last year. In addition, NUTRISYSTEM INC has also vastly surpassed the industry average cash flow growth rate of -13.84%.
  • 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 0.87 is somewhat weak and could be cause for future problems.
  • NTRI has underperformed the S&P 500 Index, declining 18.00% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • 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.

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Memorial Production Partners

Dividend Yield: 10.40%

Memorial Production Partners (NASDAQ: MEMP) shares currently have a dividend yield of 10.40%.

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 average volume for Memorial Production Partners has been 512,800 shares per day over the past 30 days. Memorial Production Partners has a market cap of $761.7 million and is part of the energy industry. Shares are up 10.3% 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.

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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