5 Hold-Rated Dividend Stocks: RHP, FTR, RWT, TWO, RIG

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."

Ryman Hospitality Properties

Dividend Yield: 5.70%

Ryman Hospitality Properties (NYSE: RHP) shares currently have a dividend yield of 5.70%.

Ryman Hospitality Properties, Inc. owns and operates hotels in the United States. The company has a P/E ratio of 249.07.

The average volume for Ryman Hospitality Properties has been 1,394,700 shares per day over the past 30 days. Ryman Hospitality Properties has a market cap of $1.8 billion and is part of the real estate industry. Shares are down 10% year to date as of the close of trading on Monday.

TheStreet Ratings rates Ryman Hospitality Properties as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, growth in earnings per share and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • 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 Real Estate Investment Trusts (REITs) industry average. The net income increased by 82.9% when compared to the same quarter one year prior, rising from $8.95 million to $16.38 million.
  • RYMAN HOSPITALITY PPTYS INC has improved earnings per share by 5.9% 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, RYMAN HOSPITALITY PPTYS INC swung to a loss, reporting -$0.60 versus $0.20 in the prior year. This year, the market expects an improvement in earnings ($1.68 versus -$0.60).
  • RHP, with its decline in revenue, underperformed when compared the industry average of 9.2%. Since the same quarter one year prior, revenues slightly dropped by 3.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for RYMAN HOSPITALITY PPTYS INC is currently lower than what is desirable, coming in at 29.07%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.68% significantly trails the industry average.
  • RHP has underperformed the S&P 500 Index, declining 11.47% 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.

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

Frontier Communications Corp Class B

Dividend Yield: 8.80%

Frontier Communications Corp Class B (NASDAQ: FTR) shares currently have a dividend yield of 8.80%.

Frontier Communications Corporation, a communications company, provides regulated and unregulated voice, data, and video services to business, residential, and wholesale customers in the United States. The company has a P/E ratio of 41.36.

The average volume for Frontier Communications Corp Class B has been 9,621,100 shares per day over the past 30 days. Frontier Communications Corp Class B has a market cap of $4.5 billion and is part of the telecommunications industry. Shares are up 6.3% year to date as of the close of trading on Monday.

TheStreet Ratings rates Frontier Communications Corp Class B as a hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins, increase in stock price during the past year and notable return on equity. 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:
  • FRONTIER COMMUNICATIONS 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. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, FRONTIER COMMUNICATIONS CORP's EPS of $0.14 remained unchanged from the prior years' EPS of $0.14. This year, the market expects an improvement in earnings ($0.23 versus $0.14).
  • FTR, with its decline in revenue, slightly underperformed the industry average of 2.0%. Since the same quarter one year prior, revenues slightly dropped by 5.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Although FTR's debt-to-equity ratio of 2.07 is very high, it is currently less than that of the industry average. Along with the unfavorable debt-to-equity ratio, FTR maintains a poor quick ratio of 0.91, which illustrates the inability to avoid short-term cash problems.
  • 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 Telecommunication Services industry. The net income has significantly decreased by 313.8% when compared to the same quarter one year ago, falling from $17.99 million to -$38.46 million.

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: 6.00%

Redwood (NYSE: RWT) shares currently have a dividend yield of 6.00%.

Redwood Trust, Inc. engages in investing, financing, and managing real estate-related assets. The company has a P/E ratio of 7.89.

The average volume for Redwood has been 1,196,400 shares per day over the past 30 days. Redwood has a market cap of $1.5 billion and is part of the real estate industry. Shares are up 12% year to date as of the close of trading on Monday.

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 revenues have generally been declining.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 195.83% and other important driving factors, this stock has surged by 41.22% 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 ($1.66 versus $1.59).
  • The gross profit margin for REDWOOD TRUST INC is rather high; currently it is at 64.70%. 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 113.60% significantly outperformed against the industry.
  • RWT, with its decline in revenue, underperformed when compared the industry average of 9.2%. Since the same quarter one year prior, revenues slightly dropped by 3.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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

Two Harbors Investment

Dividend Yield: 12.60%

Two Harbors Investment (NYSE: TWO) shares currently have a dividend yield of 12.60%.

Two Harbors Investment Corp. operates as a real estate investment trust (REIT) that focuses on investing in, financing, and managing residential mortgage-backed securities (RMBS), residential mortgage loans, and other financial assets. The company has a P/E ratio of 4.15.

The average volume for Two Harbors Investment has been 6,919,800 shares per day over the past 30 days. Two Harbors Investment has a market cap of $3.6 billion and is part of the real estate industry. Shares are down 11.5% year to date as of the close of trading on Monday.

TheStreet Ratings rates Two Harbors 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 the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • TWO's very impressive revenue growth greatly exceeded the industry average of 9.2%. Since the same quarter one year prior, revenues leaped by 133.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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. In comparison to the other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, TWO HARBORS INVESTMENT CORP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • TWO HARBORS INVESTMENT 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, TWO HARBORS INVESTMENT CORP reported lower earnings of $1.11 versus $1.27 in the prior year. This year, the market expects an improvement in earnings ($1.22 versus $1.11).
  • TWO has underperformed the S&P 500 Index, declining 10.86% 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.

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

Transocean

Dividend Yield: 4.70%

Transocean (NYSE: RIG) shares currently have a dividend yield of 4.70%.

Transocean Ltd. provides offshore contract drilling services for oil and gas wells worldwide. It offers deepwater and harsh environment drilling, oil and gas drilling management, and drilling engineering and drilling project management services, as well as logistics services. The company has a P/E ratio of 10.60.

The average volume for Transocean has been 2,730,800 shares per day over the past 30 days. Transocean has a market cap of $17.1 billion and is part of the energy industry. Shares are up 6.6% year to date as of the close of trading on Monday.

TheStreet Ratings rates Transocean as a hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. 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:
  • TRANSOCEAN LTD 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TRANSOCEAN LTD turned its bottom line around by earning $2.62 versus -$17.75 in the prior year. This year, the market expects an improvement in earnings ($4.30 versus $2.62).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 3110.0% when compared to the same quarter one year prior, rising from $10.00 million to $321.00 million.
  • RIG's debt-to-equity ratio of 0.70 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that RIG's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.73 is high and demonstrates strong liquidity.
  • 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. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, TRANSOCEAN LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has significantly decreased to $106.00 million or 80.37% 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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