4 Hold-Rated Dividend Stocks: BMR, ABX, PBI, CM

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."

BioMed Realty

Dividend Yield: 4.20%

BioMed Realty (NYSE: BMR) shares currently have a dividend yield of 4.20%.

BioMed Realty Trust, Inc. operates as a real estate investment trust (REIT) that focuses on providing real estate to the life science industry in the United States. The company has a P/E ratio of 740.00.

The average volume for BioMed Realty has been 1,773,100 shares per day over the past 30 days. BioMed Realty has a market cap of $4.1 billion and is part of the real estate industry. Shares are up 14.8% year to date as of the close of trading on Friday.

TheStreet Ratings rates BioMed Realty as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase 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, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 33.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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 Real Estate Investment Trusts (REITs) industry. The net income increased by 650.4% when compared to the same quarter one year prior, rising from $2.31 million to $17.31 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • The gross profit margin for BIOMED REALTY TRUST INC is currently lower than what is desirable, coming in at 29.10%. Regardless of BMR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, BMR's net profit margin of 10.81% is significantly lower than the industry average.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, BIOMED REALTY TRUST INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

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Barrick Gold Corporation

Dividend Yield: 4.20%

Barrick Gold Corporation (NYSE: ABX) shares currently have a dividend yield of 4.20%.

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 18,034,000 shares per day over the past 30 days. Barrick Gold Corporation has a market cap of $19.2 billion and is part of the metals & mining industry. Shares are down 45.3% year to date as of the close of trading on Friday.

TheStreet Ratings rates Barrick Gold Corporation 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 feeble growth in the company's earnings per share, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The gross profit margin for BARRICK GOLD CORP is rather high; currently it is at 56.00%. Regardless of ABX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ABX's net profit margin of 24.64% significantly outperformed against the industry.
  • ABX, with its decline in revenue, slightly underperformed the industry average of 1.5%. 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.
  • 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.
  • Net operating cash flow has decreased to $1,085.00 million or 14.70% 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.

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Pitney Bowes

Dividend Yield: 5.00%

Pitney Bowes (NYSE: PBI) shares currently have a dividend yield of 5.00%.

Pitney Bowes Inc. provides software, hardware, and services to enable physical and digital communications in the United States and internationally. The company has a P/E ratio of 8.40.

The average volume for Pitney Bowes has been 4,120,800 shares per day over the past 30 days. Pitney Bowes has a market cap of $3.0 billion and is part of the consumer durables industry. Shares are up 42.1% year to date as of the close of trading on Friday.

TheStreet Ratings rates Pitney Bowes as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and increase in stock price during the past year. 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:
  • 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 Commercial Services & Supplies industry and the overall market, PITNEY BOWES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $132.16 million or 37.67% when compared to the same quarter last year. In addition, PITNEY BOWES INC has also vastly surpassed the industry average cash flow growth rate of -22.80%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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 debt-to-equity ratio is very high at 55.10 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, PBI's quick ratio is somewhat strong at 1.04, demonstrating the ability to handle short-term liquidity needs.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Commercial Services & Supplies industry. The net income has significantly decreased by 57.5% when compared to the same quarter one year ago, falling from $158.67 million to $67.51 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.

Canadian Imperial Bank of Commerce

Dividend Yield: 4.70%

Canadian Imperial Bank of Commerce (NYSE: CM) shares currently have a dividend yield of 4.70%.

Canadian Imperial Bank of Commerce provides various financial products and services to individual, small business, commercial, corporate, and institutional customers in Canada and internationally. The company has a P/E ratio of 9.89.

The average volume for Canadian Imperial Bank of Commerce has been 203,600 shares per day over the past 30 days. Canadian Imperial Bank of Commerce has a market cap of $31.1 billion and is part of the banking industry. Shares are down 3.7% year to date as of the close of trading on Friday.

TheStreet Ratings rates Canadian Imperial Bank of Commerce as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow.

Highlights from the ratings report include:
  • 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. In comparison to the other companies in the Commercial Banks industry and the overall market, CANADIAN IMPERIAL BANK's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • The gross profit margin for CANADIAN IMPERIAL BANK is currently very high, coming in at 76.10%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CM's net profit margin of 18.68% significantly trails the industry average.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.
  • Net operating cash flow has decreased to $1,455.00 million or 39.07% when compared to the same quarter last year. Despite a decrease in cash flow CANADIAN IMPERIAL BANK is still fairing well by exceeding its industry average cash flow growth rate of -63.43%.
  • 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 Commercial Banks industry average. The net income has decreased by 4.3% when compared to the same quarter one year ago, dropping from $832.00 million to $796.00 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.

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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