5 Hold-Rated Dividend Stocks: WIN, VIP, LINE, AEC, CLI

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."

Windstream

Dividend Yield: 12.70%

Windstream (NASDAQ: WIN) shares currently have a dividend yield of 12.70%.

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 29.26

The average volume for Windstream has been 7,410,400 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 3.6% year to date as of the close of trading on Tuesday

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 53.34%. 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 0.8%. 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.

VimpelCom

Dividend Yield: 14.10%

VimpelCom (NYSE: VIP) shares currently have a dividend yield of 14.10%.

VimpelCom Ltd., a telecommunications service operator, provides voice and data services through a range of traditional and broadband mobile and fixed technologies. The company has a P/E ratio of 7.23

The average volume for VimpelCom has been 1,418,600 shares per day over the past 30 days VimpelCom has a market cap of $16.1 billion and is part of the telecommunications industry Shares are down 5.5% year to date as of the close of trading on Tuesday

TheStreet Ratings rates VimpelCom as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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 outperformed against the S&P 500 and exceeded that of the Wireless Telecommunication Services industry average. The net income increased by 28.3% when compared to the same quarter one year prior, rising from $318.00 million to $408.00 million.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 1.9%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Currently the debt-to-equity ratio of 1.89 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, VIP maintains a poor quick ratio of 0.84, which illustrates the inability to avoid short-term cash problems.
  • Net operating cash flow has decreased to $1,274.00 million or 20.72% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, VIMPELCOM LTD 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.

Linn Energy

Dividend Yield: 12.30%

Linn Energy (NASDAQ: LINE) shares currently have a dividend yield of 12.30%.

Linn Energy, LLC, an independent oil and natural gas company, engages in the acquisition and development of oil and natural gas properties.

The average volume for Linn Energy has been 4,038,700 shares per day over the past 30 days Linn Energy has a market cap of $5.9 billion and is part of the energy industry Shares are down 28.7% year to date as of the close of trading on Tuesday

TheStreet Ratings rates Linn Energy as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations 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 disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 10.7%. Since the same quarter one year prior, revenues slightly increased by 4.2%. 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.
  • Net operating cash flow has significantly increased by 842.17% to $334.59 million when compared to the same quarter last year. In addition, LINN ENERGY LLC has also vastly surpassed the industry average cash flow growth rate of -25.63%.
  • 40.39% is the gross profit margin for LINN ENERGY LLC 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, LINE's net profit margin of -60.12% significantly underperformed when compared to the industry average.
  • Currently the debt-to-equity ratio of 1.53 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.40, which clearly demonstrates the inability to cover short-term cash needs.
  • 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, LINN ENERGY LLC'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.

Associated Estates Realty

Dividend Yield: 4.70%

Associated Estates Realty (NYSE: AEC) shares currently have a dividend yield of 4.70%.

Associated Estates Realty Corporation is an independent real estate investment trust. The firm invests in the real estate markets of the United States. It specializes in owning and managing apartment communities in the Midwest, Mid-Atlantic and Southeast regions of the United States. The company has a P/E ratio of 108.53

The average volume for Associated Estates Realty has been 803,800 shares per day over the past 30 days Associated Estates Realty has a market cap of $936.6 million and is part of the real estate industry Shares are up 1% year to date as of the close of trading on Tuesday

TheStreet Ratings rates Associated Estates Realty 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 compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • AEC's revenue growth has slightly outpaced the industry average of 12.3%. Since the same quarter one year prior, revenues rose by 17.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ASSOCIATED ESTATES RLTY CORP reported significant earnings per share improvement 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ASSOCIATED ESTATES RLTY CORP turned its bottom line around by earning $0.03 versus -$0.27 in the prior year. This year, the market expects an improvement in earnings ($0.36 versus $0.03).
  • 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, ASSOCIATED ESTATES RLTY CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for ASSOCIATED ESTATES RLTY CORP is rather low; currently it is at 18.44%. Regardless of AEC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 22.99% trails 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.

Mack-Cali Realty

Dividend Yield: 5.00%

Mack-Cali Realty (NYSE: CLI) shares currently have a dividend yield of 5.00%.

Mack-Cali Realty Corporation is a real estate investment trust (REIT). It engages in the leasing, management, acquisition, development, and construction of commercial real estate properties in the United States. The company has a P/E ratio of 68.66

The average volume for Mack-Cali Realty has been 872,200 shares per day over the past 30 days Mack-Cali Realty has a market cap of $2.1 billion and is part of the real estate industry Shares are down 6.7% year to date as of the close of trading on Tuesday

TheStreet Ratings rates Mack-Cali Realty as a hold. Among the primary strengths of the company is its revenue growth. 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:
  • CLI's revenue growth trails the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 0.9%. 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.
  • MACK-CALI REALTY 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, MACK-CALI REALTY CORP reported lower earnings of $0.44 versus $0.77 in the prior year. This year, the market expects an improvement in earnings ($0.51 versus $0.44).
  • Net operating cash flow has decreased to $49.07 million or 13.77% when compared to the same quarter last year. Despite a decrease in cash flow of 13.77%, MACK-CALI REALTY CORP is in line with the industry average cash flow growth rate of -14.81%.
  • 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, MACK-CALI REALTY CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for MACK-CALI REALTY CORP is rather low; currently it is at 22.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.41% significantly trails 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.

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