4 Hold-Rated Dividend Stocks: HR, AGNC, ARR, FCX

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 4 stocks with substantial yields, that ultimately, we have rated "Hold."

Healthcare Realty

Dividend Yield: 4.70%

Healthcare Realty (NYSE: HR) shares currently have a dividend yield of 4.70%.

Healthcare Realty Trust Incorporated is an independent real estate investment trust. The firm invests in real estate markets of the United States.

The average volume for Healthcare Realty has been 859,200 shares per day over the past 30 days. Healthcare Realty has a market cap of $2.4 billion and is part of the real estate industry. Shares are up 4.7% year to date as of the close of trading on Friday.

TheStreet Ratings rates Healthcare Realty as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth 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 poor profit margins.

Highlights from the ratings report include:
  • HR's revenue growth has slightly outpaced the industry average of 7.0%. Since the same quarter one year prior, revenues slightly increased by 8.3%. 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.
  • 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. 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'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, HEALTHCARE REALTY TRUST INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for HEALTHCARE REALTY TRUST INC is currently lower than what is desirable, coming in at 26.15%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -28.72% 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.

American Capital Agency

Dividend Yield: 19.00%

American Capital Agency (NASDAQ: AGNC) shares currently have a dividend yield of 19.00%.

American Capital Agency Corp. operates as a real estate investment trust (REIT). The company has a P/E ratio of 10.29.

The average volume for American Capital Agency has been 10,660,700 shares per day over the past 30 days. American Capital Agency has a market cap of $8.8 billion and is part of the real estate industry. Shares are down 23.5% 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 compelling growth in net income, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in 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 Real Estate Investment Trusts (REITs) industry. The net income increased by 800.8% when compared to the same quarter one year prior, rising from -$261.00 million to $1,829.00 million.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, AMERICAN CAPITAL AGENCY CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • AMERICAN CAPITAL AGENCY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AMERICAN CAPITAL AGENCY CORP reported lower earnings of $4.40 versus $5.22 in the prior year. This year, the market expects an improvement in earnings ($6.88 versus $4.40).
  • The revenue fell significantly faster than the industry average of 7.0%. Since the same quarter one year prior, revenues fell by 39.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • AGNC's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 36.75%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.

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

ARMOUR Residential REIT

Dividend Yield: 19.40%

ARMOUR Residential REIT (NYSE: ARR) shares currently have a dividend yield of 19.40%.

ARMOUR Residential REIT, Inc. is a real estate investment trust launched and managed by ARMOUR Residential Management LLC. It invests in the real estate markets of the United States. The company has a P/E ratio of 1.90.

The average volume for ARMOUR Residential REIT has been 8,150,200 shares per day over the past 30 days. ARMOUR Residential REIT has a market cap of $1.6 billion and is part of the real estate industry. Shares are down 32.6% year to date as of the close of trading on Friday.

TheStreet Ratings rates ARMOUR Residential REIT as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • ARR's very impressive revenue growth greatly exceeded the industry average of 7.0%. Since the same quarter one year prior, revenues leaped by 115.9%. 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.
  • 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, ARMOUR RESIDENTIAL REIT INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • ARMOUR RESIDENTIAL REIT INC's earnings per share declined by 39.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ARMOUR RESIDENTIAL REIT INC increased its bottom line by earning $0.97 versus $0.02 in the prior year. For the next year, the market is expecting a contraction of 20.6% in earnings ($0.77 versus $0.97).
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 43.40%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 39.58% compared to 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.

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

Freeport-McMoRan Copper & Gold

Dividend Yield: 4.30%

Freeport-McMoRan Copper & Gold (NYSE: FCX) shares currently have a dividend yield of 4.30%.

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 10.32.

The average volume for Freeport-McMoRan Copper & Gold has been 17,352,100 shares per day over the past 30 days. Freeport-McMoRan Copper & Gold has a market cap of $27.6 billion and is part of the metals & mining industry. Shares are down 14.9% 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 attractive valuation levels 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, generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:
  • FCX, with its decline in revenue, slightly underperformed the industry average of 0.4%. Since the same quarter one year prior, revenues slightly dropped by 4.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • FREEPORT-MCMORAN COP&GOLD's earnings per share declined by 33.8% 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 24.2% in earnings ($2.41 versus $3.18).
  • The debt-to-equity ratio of 1.07 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, FCX maintains a poor quick ratio of 0.92, which illustrates the inability to avoid short-term cash problems.

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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