5 Hold-Rated Dividend Stocks: NRGY, CWH, PAAS, NYMT, WIN

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."

Inergy L.P

Dividend Yield: 7.80%

Inergy L.P (NYSE: NRGY) shares currently have a dividend yield of 7.80%.

Inergy, L.P., an integrated energy midstream master limited partnership, engages in the storage and transportation of natural gas and natural gas liquids (NGL) in the United States and Canada. The company has a P/E ratio of 3.80.

The average volume for Inergy L.P has been 772,100 shares per day over the past 30 days. Inergy L.P has a market cap of $2.0 billion and is part of the energy industry. Shares are down 19.2% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Inergy L.P as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, NRGY's share price has jumped by 29.81%, exceeding the performance of the broader market during that same time frame. 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, INERGY LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • NRGY, with its decline in revenue, underperformed when compared the industry average of 10.6%. Since the same quarter one year prior, revenues fell by 32.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for INERGY LP is rather low; currently it is at 18.60%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -1.28% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $121.00 million or 29.36% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, INERGY LP has marginally lower results.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

CommonWealth REIT

Dividend Yield: 4.60%

CommonWealth REIT (NYSE: CWH) shares currently have a dividend yield of 4.60%.

CommonWealth REIT is a real estate investment trust launched and managed by Reit Management & Research LLC. The fund invests in the real estate markets of the United States. It seeks to invest in office buildings, industrial buildings, and leased industrial land. The company has a P/E ratio of 54.58.

The average volume for CommonWealth REIT has been 1,933,400 shares per day over the past 30 days. CommonWealth REIT has a market cap of $2.6 billion and is part of the real estate industry. Shares are up 38.3% year to date as of the close of trading on Thursday.

TheStreet Ratings rates CommonWealth REIT as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • CWH's revenue growth has slightly outpaced the industry average of 12.0%. Since the same quarter one year prior, revenues rose by 13.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • COMMONWEALTH REIT has improved earnings per share by 33.3% 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 two years. During the past fiscal year, COMMONWEALTH REIT increased its bottom line by earning $0.34 versus $0.19 in the prior year.
  • 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.
  • 36.70% is the gross profit margin for COMMONWEALTH REIT which we consider to be strong. Regardless of CWH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CWH's net profit margin of 9.17% is significantly lower than the industry average.
  • 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, COMMONWEALTH REIT underperformed against that of the industry average and is significantly less than that of the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

Pan American Silver Corporation

Dividend Yield: 4.40%

Pan American Silver Corporation (NASDAQ: PAAS) shares currently have a dividend yield of 4.40%.

Pan American Silver Corp. engages in the exploration, development, and operation of silver producing properties and assets. It produces and sells silver, gold, copper, lead, and zinc. The company has a P/E ratio of 63.78.

The average volume for Pan American Silver Corporation has been 2,402,100 shares per day over the past 30 days. Pan American Silver Corporation has a market cap of $1.7 billion and is part of the metals & mining industry. Shares are down 38.7% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Pan American Silver Corporation as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, 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 a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and disappointing return on equity.

Highlights from the ratings report include:
  • PAAS's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 6.2%. 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.
  • PAAS's debt-to-equity ratio is very low at 0.02 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 3.12, which clearly demonstrates the ability to cover short-term cash needs.
  • 43.20% is the gross profit margin for PAN AMERICAN SILVER CORP 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, PAAS's net profit margin of 8.29% compares favorably to the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 33.08%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 78.72% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • PAN AMERICAN SILVER CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, PAN AMERICAN SILVER CORP reported lower earnings of $0.61 versus $3.01 in the prior year.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

New York Mortgage

Dividend Yield: 15.50%

New York Mortgage (NASDAQ: NYMT) shares currently have a dividend yield of 15.50%.

New York Mortgage Trust, Inc., a real estate investment trust (REIT), engages in acquiring, investing in, financing, and managing mortgage-related and financial assets in the United States. The company has a P/E ratio of 7.20.

The average volume for New York Mortgage has been 1,604,500 shares per day over the past 30 days. New York Mortgage has a market cap of $444.8 million and is part of the real estate industry. Shares are up 5.2% year to date as of the close of trading on Thursday.

TheStreet Ratings rates New York Mortgage 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 attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • NYMT's very impressive revenue growth greatly exceeded the industry average of 12.0%. Since the same quarter one year prior, revenues leaped by 205.2%. 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 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, NEW YORK MORTGAGE TRUST INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • NEW YORK MORTGAGE TRUST INC's earnings per share declined by 26.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NEW YORK MORTGAGE TRUST INC increased its bottom line by earning $1.25 versus $0.55 in the prior year. For the next year, the market is expecting a contraction of 12.0% in earnings ($1.10 versus $1.25).
  • The gross profit margin for NEW YORK MORTGAGE TRUST INC is currently lower than what is desirable, coming in at 27.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 23.45% trails that of the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

Windstream

Dividend Yield: 12.50%

Windstream (NASDAQ: WIN) shares currently have a dividend yield of 12.50%.

Windstream Corporation provides communications and technology solutions in the United States. The company offers managed services and cloud computing services to businesses, as well as broadband, voice, and video services to consumers primarily in rural markets. The company has a P/E ratio of 29.56.

The average volume for Windstream has been 7,796,200 shares per day over the past 30 days. Windstream has a market cap of $4.7 billion and is part of the telecommunications industry. Shares are down 5.8% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Windstream as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk 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. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, WINDSTREAM CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for WINDSTREAM CORP is rather high; currently it is at 53.30%. Regardless of WIN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.48% trails the industry average.
  • WIN, with its decline in revenue, slightly underperformed the industry average of 0.7%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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 Diversified Telecommunication Services industry average. The net income has decreased by 13.4% when compared to the same quarter one year ago, dropping from $60.40 million to $52.30 million.
  • The debt-to-equity ratio is very high at 8.79 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.32, which clearly demonstrates the inability to cover short-term cash needs.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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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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