4 Hold-Rated Dividend Stocks: PBT, CRT, VGR, CCCL

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 4 stocks with substantial yields, that ultimately, we have rated "Hold."

Permian Basin Royalty

Dividend Yield: 7.70%

Permian Basin Royalty (NYSE: PBT) shares currently have a dividend yield of 7.70%.

Permian Basin Royalty Trust owns overriding royalty interests in various oil and gas properties in the United States. The company has a P/E ratio of 15.77.

The average volume for Permian Basin Royalty has been 174,600 shares per day over the past 30 days. Permian Basin Royalty has a market cap of $639.5 million and is part of the energy industry. Shares are up 13.8% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Permian Basin 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:
  • PBT 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 1.32, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for PERMIAN BASIN ROYALTY TRUST is currently very high, coming in at 100.00%. PBT has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, PBT's net profit margin of 98.20% significantly outperformed against the industry.
  • PBT, with its decline in revenue, underperformed when compared the industry average of 8.8%. Since the same quarter one year prior, revenues fell by 34.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • PERMIAN BASIN ROYALTY TRUST's earnings per share declined by 35.5% 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, PERMIAN BASIN ROYALTY TRUST reported lower earnings of $1.16 versus $1.36 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 35.2% when compared to the same quarter one year ago, falling from $14.32 million to $9.28 million.

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Cross Timbers Royalty

Dividend Yield: 7.20%

Cross Timbers Royalty (NYSE: CRT) shares currently have a dividend yield of 7.20%.

Cross Timbers Royalty Trust operates as an express trust in the United States. The company's function is to collect and distribute monthly net profits income from royalty interests and overriding royalty interests to unitholders. The company has a P/E ratio of 13.71.

The average volume for Cross Timbers Royalty has been 18,100 shares per day over the past 30 days. Cross Timbers Royalty has a market cap of $181.8 million and is part of the energy industry. Shares are up 12.6% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Cross Timbers 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:
  • CRT 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 10.58, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for CROSS TIMBERS ROYALTY TRUST is currently very high, coming in at 100.00%. CRT has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, CRT's net profit margin of 97.90% significantly outperformed against the industry.
  • CRT, with its decline in revenue, slightly underperformed the industry average of 8.8%. Since the same quarter one year prior, revenues fell by 13.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • CROSS TIMBERS ROYALTY TRUST's earnings per share declined by 14.5% 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, CROSS TIMBERS ROYALTY TRUST reported lower earnings of $2.48 versus $2.99 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 14.2% when compared to the same quarter one year ago, dropping from $4.14 million to $3.55 million.

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Vector Group

Dividend Yield: 10.00%

Vector Group (NYSE: VGR) shares currently have a dividend yield of 10.00%.

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 38.24.

The average volume for Vector Group has been 391,300 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 8.4% year to date as of the close of trading on Thursday.

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 growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and relatively poor performance when compared with the S&P 500 during 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 78.1% when compared to the same quarter one year prior, rising from -$7.69 million to -$1.68 million.
  • 49.00% 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. Regardless of the strong results of the gross profit margin, the net profit margin of -1.27% is in-line with the industry average.
  • VGR, with its decline in revenue, underperformed when compared the industry average of 6.9%. Since the same quarter one year prior, revenues slightly dropped by 3.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 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, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • Net operating cash flow has significantly decreased to -$9.92 million or 124.44% 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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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 1.63.

The average volume for China Ceramics has been 87,500 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 0.5% year to date as of the close of trading on Thursday.

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, reasonable valuation levels and good cash flow from operations. 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 3.37, which clearly demonstrates the ability to cover short-term cash needs.
  • CCCL, with its very weak revenue results, has greatly underperformed against the industry average of 3.2%. Since the same quarter one year prior, revenues plummeted by 59.4%. 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 Building Products industry. The net income has significantly decreased by 107.6% when compared to the same quarter one year ago, falling from $11.38 million to -$0.87 million.
  • The gross profit margin for CHINA CERAMICS CO LTD is currently extremely low, coming in at 14.80%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -3.60% 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.

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.

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