4 Hold-Rated Dividend Stocks: NLY, PMT, PDM, VLY

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."

Annaly Capital Management

Dividend Yield: 13.90%

Annaly Capital Management (NYSE: NLY) shares currently have a dividend yield of 13.90%.

Annaly Capital Management, Inc. owns, manages, and finances a portfolio of real estate related investments in United States. The company has a P/E ratio of 6.81

The average volume for Annaly Capital Management has been 12,757,100 shares per day over the past 30 days Annaly Capital Management has a market cap of $10.9 billion and is part of the real estate industry Shares are down 15.5% year to date as of the close of trading on Monday

TheStreet Ratings rates Annaly Capital Management as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and unimpressive growth in net income.

Highlights from the ratings report include:
  • The gross profit margin for ANNALY CAPITAL MANAGEMENT is currently very high, coming in at 94.49%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 92.42% significantly outperformed against the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, ANNALY CAPITAL MANAGEMENT has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The change in net income from the same quarter one year ago has exceeded that of the Real Estate Investment Trusts (REITs) industry average, but is less than that of the S&P 500. The net income has decreased by 3.5% when compared to the same quarter one year ago, dropping from $901.81 million to $870.28 million.
  • Net operating cash flow has significantly decreased to -$3,882.25 million or 177.73% 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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PennyMac Mortgage Investment

Dividend Yield: 10.90%

PennyMac Mortgage Investment (NYSE: PMT) shares currently have a dividend yield of 10.90%.

PennyMac Mortgage Investment Trust, a specialty finance company, through its subsidiaries, invests primarily in residential mortgage loans and mortgage-related assets. The company operates in two segments, Correspondent Lending and Investment Activities. The company has a P/E ratio of 6.17

The average volume for PennyMac Mortgage Investment has been 1,175,500 shares per day over the past 30 days PennyMac Mortgage Investment has a market cap of $1.2 billion and is part of the real estate industry Shares are down 16.9% year to date as of the close of trading on Monday

TheStreet Ratings rates PennyMac Mortgage Investment as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:
  • PMT's very impressive revenue growth greatly exceeded the industry average of 12.3%. Since the same quarter one year prior, revenues leaped by 155.2%. 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 Real Estate Investment Trusts (REITs) industry and the overall market, PENNYMAC MORTGAGE INVEST TR's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for PENNYMAC MORTGAGE INVEST TR is rather high; currently it is at 60.60%. Regardless of PMT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PMT's net profit margin of 44.76% significantly outperformed against the industry.
  • In its most recent trading session, PMT 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. 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 significantly decreased to -$225.15 million or 498.35% 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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Piedmont Office Realty

Dividend Yield: 4.40%

Piedmont Office Realty (NYSE: PDM) shares currently have a dividend yield of 4.40%.

Piedmont Office Realty Trust, Inc. engages in the acquisition and ownership of commercial real estate properties in the United States. Its property portfolio primarily consists of office and industrial buildings, warehouses, and manufacturing facilities. The company has a P/E ratio of 45.65

The average volume for Piedmont Office Realty has been 1,016,200 shares per day over the past 30 days Piedmont Office Realty has a market cap of $3.1 billion and is part of the real estate industry Shares are up 1.4% year to date as of the close of trading on Monday

TheStreet Ratings rates Piedmont Office Realty 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 deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.7%. Since the same quarter one year prior, revenues slightly increased by 1.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 60.6% when compared to the same quarter one year ago, falling from $37.23 million to $14.65 million.
  • 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, PIEDMONT OFFICE REALTY TRUST 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.

Valley National Bancorp

Dividend Yield: 6.60%

Valley National Bancorp (NYSE: VLY) shares currently have a dividend yield of 6.60%.

Valley National Bancorp operates as the bank holding company for the Valley National Bank that provides commercial, retail, and wealth management financial services. The company has a P/E ratio of 13.87

The average volume for Valley National Bancorp has been 1,197,400 shares per day over the past 30 days Valley National Bancorp has a market cap of $2.0 billion and is part of the banking industry Shares are up 5.7% year to date as of the close of trading on Monday

TheStreet Ratings rates Valley National Bancorp as a hold. The company's strengths can be seen in multiple areas, such as its 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, unimpressive growth in net income and weak operating cash flow.

Highlights from the ratings report include:
  • The gross profit margin for VALLEY NATIONAL BANCORP is currently very high, coming in at 75.71%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, VLY's net profit margin of 16.98% significantly trails 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 Commercial Banks industry and the overall market on the basis of return on equity, VALLEY NATIONAL BANCORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • VLY, with its decline in revenue, slightly underperformed the industry average of 3.4%. Since the same quarter one year prior, revenues slightly dropped by 6.3%. 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 greatly underperformed compared to the Commercial Banks industry average. The net income has decreased by 9.3% when compared to the same quarter one year ago, dropping from $34.53 million to $31.31 million.
  • Net operating cash flow has significantly decreased to $40.34 million or 71.47% 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.

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