5 Hold-Rated Dividend Stocks: VGR, STON, QRE, DSWL, GSJK

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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."

Vector Group

Dividend Yield: 9.60%

Vector Group (NYSE: VGR) shares currently have a dividend yield of 9.60%.

Vector Group Ltd., through its subsidiaries, engages in the manufacture and sale of cigarettes in the United States. The company operates in Tobacco and Real Estate segments. The company has a P/E ratio of 41.62.

The average volume for Vector Group has been 364,200 shares per day over the past 30 days. Vector Group has a market cap of $1.5 billion and is part of the tobacco industry. Shares are up 12.9% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Vector Group as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and relatively poor performance when compared with the S&P 500 during the past year.

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 Tobacco industry. The net income increased by 78.1% when compared to the same quarter one year prior, rising from -$7.69 million to -$1.68 million.
  • The gross profit margin for VECTOR GROUP LTD is rather high; currently it is at 53.27%. 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 -1.27% is in-line with the industry average.
  • VGR, with its decline in revenue, slightly underperformed the industry average of 6.1%. Since the same quarter one year prior, revenues slightly dropped by 3.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • In its most recent trading session, VGR 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. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • Net operating cash flow has significantly decreased to -$9.92 million or 124.44% 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.

Stonemor Partners

Dividend Yield: 9.00%

Stonemor Partners (NYSE: STON) shares currently have a dividend yield of 9.00%.

StoneMor Partners L.P., together with its subsidiaries, engages in the ownership and operation of cemeteries in the United States. It operates through Cemetery Operations Southeast, Cemetery Operations Northeast, Cemetery Operations West, and Funeral Homes segments.

The average volume for Stonemor Partners has been 82,000 shares per day over the past 30 days. Stonemor Partners has a market cap of $571.0 million and is part of the diversified services industry. Shares are up 23.8% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Stonemor Partners as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and increase in stock price during the past year. 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:
  • STON's revenue growth trails the industry average of 23.7%. Since the same quarter one year prior, revenues slightly increased by 0.0%. 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 STONEMOR PARTNERS LP is rather high; currently it is at 52.29%. Regardless of STON's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, STON's net profit margin of -3.69% significantly underperformed when compared to the industry average.
  • 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 Diversified Consumer Services industry. The net income has significantly decreased by 208.4% when compared to the same quarter one year ago, falling from $2.03 million to -$2.20 million.
  • Net operating cash flow has decreased to $6.87 million or 16.15% 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.

QR Energy

Dividend Yield: 11.10%

QR Energy (NYSE: QRE) shares currently have a dividend yield of 11.10%.

QR Energy, LP, through its subsidiary, QRE Operating, LLC, engages in the acquisition, exploitation, development, and production of oil and natural gas properties in the United States. The company has a P/E ratio of 50.34.

The average volume for QR Energy has been 423,100 shares per day over the past 30 days. QR Energy has a market cap of $1.0 billion and is part of the energy industry. Shares are up 6.3% year to date as of the close of trading on Thursday.

TheStreet Ratings rates QR Energy as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and growth in earnings per share. 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 weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 10.8%. Since the same quarter one year prior, revenues rose by 11.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 0.6% when compared to the same quarter one year prior, going from -$8.23 million to -$8.17 million.
  • The gross profit margin for QR ENERGY LP is rather high; currently it is at 59.24%. Regardless of QRE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, QRE's net profit margin of -7.79% significantly underperformed when compared to the industry average.
  • QRE has underperformed the S&P 500 Index, declining 5.12% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • Net operating cash flow has decreased to $33.92 million or 33.92% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, QR ENERGY LP 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.

Deswell Industries

Dividend Yield: 7.70%

Deswell Industries (NASDAQ: DSWL) shares currently have a dividend yield of 7.70%.

Deswell Industries, Inc. engages in the manufacture and sale of injection-molded plastic parts and components, electronic products and subassemblies, and metallic molds and accessory parts for original equipment manufacturers and contract manufacturers.

The average volume for Deswell Industries has been 12,400 shares per day over the past 30 days. Deswell Industries has a market cap of $42.0 million and is part of the consumer non-durables industry. Shares are up 7.9% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Deswell Industries 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 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:
  • DSWL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.18, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has slightly increased to $2.21 million or 8.03% when compared to the same quarter last year. In addition, DESWELL INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of -69.14%.
  • DSWL, with its decline in revenue, underperformed when compared the industry average of 0.3%. Since the same quarter one year prior, revenues fell by 22.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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 Chemicals industry and the overall market, DESWELL INDUSTRIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for DESWELL INDUSTRIES INC is currently extremely low, coming in at 13.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -21.00% is significantly below that of 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.

Compressco Partners

Dividend Yield: 8.10%

Compressco Partners (NASDAQ: GSJK) shares currently have a dividend yield of 8.10%.

Compressco Partners, L.P. provides compression-based production enhancement services for natural gas and oil exploration and production companies. Its production enhancement services are used in both conventional wellhead compression applications and unconventional compression applications. The company has a P/E ratio of 18.38.

The average volume for Compressco Partners has been 15,400 shares per day over the past 30 days. Compressco Partners has a market cap of $193.2 million and is part of the energy industry. Shares are up 25.4% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Compressco Partners as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 36.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • GSJK's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.34, which illustrates the ability to avoid short-term cash problems.
  • 43.49% is the gross profit margin for COMPRESSCO PARTNERS LP which we consider to be strong. Regardless of GSJK'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 14.75% 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. When compared to other companies in the Energy Equipment & Services industry and the overall market, COMPRESSCO PARTNERS LP'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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