3 Hold-Rated Dividend Stocks: CYS, STM, RY

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

CYS Investments

Dividend Yield: 15.10%

CYS Investments (NYSE: CYS) shares currently have a dividend yield of 15.10%.

No company description available. The company has a P/E ratio of 4.79

The average volume for CYS Investments has been 3,061,900 shares per day over the past 30 days CYS Investments has a market cap of $1.6 billion and is part of the real estate industry Shares are down 23.3% year to date as of the close of trading on Wednesday

TheStreet Ratings rates CYS Investments as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, 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 disappointing return on equity.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 11.8%. 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 gross profit margin for CYS INVESTMENTS INC is currently very high, coming in at 92.40%. 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 -22.16% is in-line with the industry average.
  • CYS INVESTMENTS INC 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, CYS INVESTMENTS INC reported lower earnings of $2.75 versus $3.63 in the prior year. For the next year, the market is expecting a contraction of 69.6% in earnings ($0.84 versus $2.75).
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 123.4% when compared to the same quarter one year ago, falling from $69.12 million to -$16.20 million.

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

STMicroelectronics

Dividend Yield: 4.50%

STMicroelectronics (NYSE: STM) shares currently have a dividend yield of 4.50%.

STMicroelectronics N.V., an independent semiconductor company, engages in the design, development, manufacture, and marketing of a range of semiconductor integrated circuits and discrete devices.

The average volume for STMicroelectronics has been 1,576,000 shares per day over the past 30 days STMicroelectronics has a market cap of $7.8 billion and is part of the electronics industry Shares are up 25% year to date as of the close of trading on Wednesday

TheStreet Ratings rates STMicroelectronics as a hold. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, 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 feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • 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.
  • STM's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.91 is somewhat weak and could be cause for future problems.
  • 47.40% is the gross profit margin for STMICROELECTRONICS NV which we consider to be strong. Regardless of STM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, STM's net profit margin of -3.50% significantly underperformed when compared to the industry average.
  • STMICROELECTRONICS NV 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, STMICROELECTRONICS NV reported lower earnings of $0.72 versus $0.91 in the prior year. For the next year, the market is expecting a contraction of 111.1% in earnings (-$0.08 versus $0.72).
  • 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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 118.1% when compared to the same quarter one year ago, falling from $420.00 million to -$76.00 million.

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

Royal Bank Of Canada

Dividend Yield: 4.20%

Royal Bank Of Canada (NYSE: RY) shares currently have a dividend yield of 4.20%.

Royal Bank of Canada provides personal and commercial banking, wealth management, insurance, investor and treasury, and capital markets services worldwide. The company has a P/E ratio of 10.79

The average volume for Royal Bank Of Canada has been 685,400 shares per day over the past 30 days Royal Bank Of Canada has a market cap of $82.6 billion and is part of the banking industry Shares are down 3.5% year to date as of the close of trading on Wednesday

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

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 7.7%. Growth in the company's revenue appears to have helped boost the 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 Commercial Banks industry and the overall market, ROYAL BANK OF CANADA's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for ROYAL BANK OF CANADA is currently very high, coming in at 75.60%. 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 19.75% 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. Looking ahead, our view is that this company's fundamentals will 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 company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Commercial Banks industry average, but is greater than that of the S&P 500. The net income increased by 26.8% when compared to the same quarter one year prior, rising from $1,508.00 million to $1,912.00 million.

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

Other helpful dividend tools from TheStreet:
null

If you liked this article you might like

Jim Cramer: It's That Time When Losers Win in the Stock Market

Jim Cramer: It's That Time When Losers Win in the Stock Market

Most Investors Should Own a Lot More REITs

Most Investors Should Own a Lot More REITs

Mortgage REITs Are Rolling Right Along

Mortgage REITs Are Rolling Right Along

Have Faith in Mortgage REITs

Have Faith in Mortgage REITs

3 Hold-Rated Dividend Stocks: CYS, SIR, NOK

3 Hold-Rated Dividend Stocks: CYS, SIR, NOK