5 Hold-Rated Dividend Stocks: FCX, HME, IAG, RWT, AGNC

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."

Freeport-McMoRan Copper & Gold

Dividend Yield: 4.40%

Freeport-McMoRan Copper & Gold (NYSE: FCX) shares currently have a dividend yield of 4.40%.

Freeport-McMoRan Copper & Gold Inc. engages in the exploration of mineral resource properties. The company primarily explores for copper, gold, molybdenum, cobalt, silver, and other metals, such as rhenium and magnetite. The company has a P/E ratio of 9.26.

The average volume for Freeport-McMoRan Copper & Gold has been 19,361,300 shares per day over the past 30 days. Freeport-McMoRan Copper & Gold has a market cap of $27.1 billion and is part of the metals & mining industry. Shares are down 16.6% year to date as of the close of trading on Friday.

TheStreet Ratings rates Freeport-McMoRan Copper & Gold as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, 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 and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has slightly increased to $831.00 million or 3.74% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -25.43%.
  • Despite currently having a low debt-to-equity ratio of 0.56, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.47 is very high and demonstrates very strong liquidity.
  • 41.09% is the gross profit margin for FREEPORT-MCMORAN COP&GOLD which we consider to be strong. Regardless of FCX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FCX's net profit margin of 14.13% compares favorably to the industry average.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, FCX has underperformed the S&P 500 Index, declining 11.84% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • FREEPORT-MCMORAN COP&GOLD's earnings per share declined by 15.0% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, FREEPORT-MCMORAN COP&GOLD reported lower earnings of $3.18 versus $4.77 in the prior year. For the next year, the market is expecting a contraction of 6.3% in earnings ($2.98 versus $3.18).

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

Home Properties

Dividend Yield: 4.20%

Home Properties (NYSE: HME) shares currently have a dividend yield of 4.20%.

Home Properties, Inc. is an independent real estate investment trust. The firm invests in the real estate markets of the United States. It is engaged in the ownership, management, acquisition, rehabilitation and development of residential apartment communities. The company has a P/E ratio of 46.81.

The average volume for Home Properties has been 504,200 shares per day over the past 30 days. Home Properties has a market cap of $3.4 billion and is part of the real estate industry. Shares are up 7.6% year to date as of the close of trading on Friday.

TheStreet Ratings rates Home Properties as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and reasonable valuation levels. 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:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 237.1% when compared to the same quarter one year prior, rising from $15.39 million to $51.88 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 9.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, HOME PROPERTIES INC's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for HOME PROPERTIES INC is currently lower than what is desirable, coming in at 31.82%. Regardless of HME's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, HME's net profit margin of 31.05% compares favorably to 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.

Iamgold

Dividend Yield: 5.70%

Iamgold (NYSE: IAG) shares currently have a dividend yield of 5.70%.

IAMGOLD Corporation engages in the exploration, development, and operation of mining properties. Its products include gold, silver, niobium, and copper deposits. The company has a P/E ratio of 7.35.

The average volume for Iamgold has been 7,096,400 shares per day over the past 30 days. Iamgold has a market cap of $1.7 billion and is part of the metals & mining industry. Shares are down 61.6% year to date as of the close of trading on Friday.

TheStreet Ratings rates Iamgold 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, reasonable valuation levels 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 weak operating cash flow.

Highlights from the ratings report include:
  • IAG's debt-to-equity ratio is very low at 0.17 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 2.87, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for IAMGOLD CORP is rather high; currently it is at 52.18%. Regardless of IAG'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 3.57% trails the industry average.
  • 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 Metals & Mining industry. The net income has significantly decreased by 90.8% when compared to the same quarter one year ago, falling from $119.20 million to $10.90 million.
  • Net operating cash flow has decreased to $99.50 million or 41.57% 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.

Redwood

Dividend Yield: 6.50%

Redwood (NYSE: RWT) shares currently have a dividend yield of 6.50%.

Redwood Trust, Inc. engages in investing, financing, and managing real estate-related assets. The company has a P/E ratio of 8.97.

The average volume for Redwood has been 1,186,800 shares per day over the past 30 days. Redwood has a market cap of $1.4 billion and is part of the real estate industry. Shares are up 1.4% year to date as of the close of trading on Friday.

TheStreet Ratings rates Redwood as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. 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:
  • Powered by its strong earnings growth of 86.48% and other important driving factors, this stock has surged by 34.77% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • REDWOOD TRUST INC 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, REDWOOD TRUST INC increased its bottom line by earning $1.59 versus $0.31 in the prior year. This year, the market expects an improvement in earnings ($1.76 versus $1.59).
  • The gross profit margin for REDWOOD TRUST INC is rather high; currently it is at 59.58%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, RWT's net profit margin of 113.23% significantly outperformed against the industry.
  • RWT, with its decline in revenue, underperformed when compared the industry average of 12.3%. Since the same quarter one year prior, revenues slightly dropped by 8.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has decreased to -$287.03 million or 22.83% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, REDWOOD TRUST INC 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.

American Capital Agency

Dividend Yield: 18.50%

American Capital Agency (NASDAQ: AGNC) shares currently have a dividend yield of 18.50%.

American Capital Agency Corp. operates as a real estate investment trust (REIT). The company has a P/E ratio of 10.54.

The average volume for American Capital Agency has been 10,327,100 shares per day over the past 30 days. American Capital Agency has a market cap of $9.0 billion and is part of the real estate industry. Shares are down 21.6% year to date as of the close of trading on Friday.

TheStreet Ratings rates American Capital Agency as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations 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:
  • Net operating cash flow has slightly increased to $518.00 million or 9.74% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -14.13%.
  • The gross profit margin for AMERICAN CAPITAL AGENCY CORP is currently very high, coming in at 91.94%. Regardless of AGNC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AGNC's net profit margin of 44.33% significantly outperformed against the industry.
  • 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 64.0% when compared to the same quarter one year ago, falling from $641.00 million to $231.00 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, AMERICAN CAPITAL AGENCY CORP's return on equity is below 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.

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