5 Hold-Rated Dividend Stocks: NRGY, MT, FTR, EVEP, VALE

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: 7.20%

Inergy L.P (NYSE: NRGY) shares currently have a dividend yield of 7.20%.

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 5.97

The average volume for Inergy L.P has been 780,200 shares per day over the past 30 days Inergy L.P has a market cap of $2.7 billion and is part of the energy industry Shares are down 11.9% year to date as of the close of trading on Friday

TheStreet Ratings rates Inergy L.P as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity and largely solid financial position with reasonable debt levels by most measures. 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:
  • 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 13.3%. 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.
  • 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.
  • 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 114.3% when compared to the same quarter one year ago, falling from $40.70 million to -$5.80 million.

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

ArcelorMittal

Dividend Yield: 6.00%

ArcelorMittal (NYSE: MT) shares currently have a dividend yield of 6.00%.

ArcelorMittal, together with its subsidiaries, operates as an integrated steel and mining company worldwide. The company operates through six segments: Flat Carbon Americas; Flat Carbon Europe; Long Carbon Americas and Europe; Asia, Africa, and CIS; Distribution Solutions; and Mining.

The average volume for ArcelorMittal has been 6,943,100 shares per day over the past 30 days ArcelorMittal has a market cap of $17.7 billion and is part of the metals & mining industry Shares are down 35.9% year to date as of the close of trading on Friday

TheStreet Ratings rates ArcelorMittal as a hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.52, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that MT's debt-to-equity ratio is low, the quick ratio, which is currently 0.61, displays a potential problem in covering short-term cash needs.
  • MT, with its decline in revenue, slightly underperformed the industry average of 6.0%. Since the same quarter one year prior, revenues fell by 13.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ARCELORMITTAL SA 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ARCELORMITTAL SA swung to a loss, reporting -$2.42 versus $0.86 in the prior year. This year, the market expects an improvement in earnings ($0.33 versus -$2.42).
  • The gross profit margin for ARCELORMITTAL SA is currently extremely low, coming in at 7.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.74% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$302.00 million or 159.80% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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

Frontier Communications Corp Class B

Dividend Yield: 10.00%

Frontier Communications Corp Class B (NASDAQ: FTR) shares currently have a dividend yield of 10.00%.

Frontier Communications Corporation, a communications company, provides regulated and unregulated voice, data, and video services to business, residential, and wholesale customers in the United States. The company has a P/E ratio of 28.27

The average volume for Frontier Communications Corp Class B has been 8,400,300 shares per day over the past 30 days Frontier Communications Corp Class B has a market cap of $4.0 billion and is part of the telecommunications industry Shares are down 5.4% year to date as of the close of trading on Friday

TheStreet Ratings rates Frontier Communications Corp Class B as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, reasonable valuation levels and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and generally higher debt management risk.

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 Diversified Telecommunication Services industry. The net income increased by 79.8% when compared to the same quarter one year prior, rising from $26.77 million to $48.14 million.
  • 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 2.07 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, FTR has managed to keep a strong quick ratio of 1.51, which demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has declined marginally to $359.29 million or 6.07% 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.

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

EV Energy Partner

Dividend Yield: 8.10%

EV Energy Partner (NASDAQ: EVEP) shares currently have a dividend yield of 8.10%.

EV Energy Partners, L.P. engages in the acquisition, development, and production of oil and natural gas properties in the United States.

The average volume for EV Energy Partner has been 491,300 shares per day over the past 30 days EV Energy Partner has a market cap of $1.6 billion and is part of the energy industry Shares are down 33.9% year to date as of the close of trading on Friday

TheStreet Ratings rates EV Energy Partner 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:
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 13.3%. Since the same quarter one year prior, revenues slightly dropped by 5.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • EVEP's debt-to-equity ratio of 0.96 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. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.14 is sturdy.
  • 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 262.9% when compared to the same quarter one year ago, falling from $28.59 million to -$46.58 million.
  • 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, EV ENERGY PARTNERS LP's return on equity significantly trails that of both the industry average and 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.

Vale

Dividend Yield: 5.70%

Vale (NYSE: VALE) shares currently have a dividend yield of 5.70%.

Vale S.A. engages in the research, production, and marketing of iron ore and pellets, nickel, fertilizers, copper, coal, manganese, ferroalloys, cobalt, platinum group metals, and precious metals in Brazil and internationally. The company has a P/E ratio of 13.52

The average volume for Vale has been 19,306,700 shares per day over the past 30 days Vale has a market cap of $67.7 billion and is part of the metals & mining industry Shares are down 37.3% year to date as of the close of trading on Friday

TheStreet Ratings rates Vale 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 attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • VALE's revenue growth has slightly outpaced the industry average of 6.0%. Since the same quarter one year prior, revenues slightly increased by 0.2%. 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 current debt-to-equity ratio, 0.42, is low and is below the industry average, implying that there has been successful management of debt levels. 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 VALE SA is rather high; currently it is at 56.60%. Regardless of VALE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VALE's net profit margin of 28.44% significantly outperformed against the industry.
  • Looking at the price performance of VALE's shares over the past 12 months, there is not much good news to report: the stock is down 30.97%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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, VALE SA has outperformed in comparison with the industry average, but has underperformed when compared to 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.

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