4 Hold-Rated Dividend Stocks: NSH, JHX, FULL, SJT

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."

NuStar GP Holdings

Dividend Yield: 9.00%

NuStar GP Holdings (NYSE: NSH) shares currently have a dividend yield of 9.00%.

NuStar GP Holdings, LLC owns general partner and limited partner interests in NuStar Energy L.P. that engages in the terminalling and storage of petroleum products, transportation of petroleum products and anhydrous ammonia, and petroleum refining and marketing. The company has a P/E ratio of 21.72.

The average volume for NuStar GP Holdings has been 212,700 shares per day over the past 30 days. NuStar GP Holdings has a market cap of $1.0 billion and is part of the energy industry. Shares are down 13.5% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates NuStar GP Holdings as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and expanding profit margins. 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:
  • NSH's very impressive revenue growth greatly exceeded the industry average of 10.2%. Since the same quarter one year prior, revenues leaped by 141.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 137.8% when compared to the same quarter one year prior, rising from -$33.21 million to $12.56 million.
  • The gross profit margin for NUSTAR GP HOLDINGS LLC is currently very high, coming in at 100.00%. NSH has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, NSH's net profit margin of 93.60% significantly outperformed against the industry.
  • NUSTAR GP HOLDINGS LLC 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, NUSTAR GP HOLDINGS LLC reported lower earnings of $0.05 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($1.26 versus $0.05).
  • NSH has underperformed the S&P 500 Index, declining 22.87% 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.

James Hardie Industries

Dividend Yield: 8.40%

James Hardie Industries (NYSE: JHX) shares currently have a dividend yield of 8.40%.

James Hardie Industries plc, together with its subsidiaries, manufactures and sells fiber cement products and systems for interior and exterior building construction applications primarily in the United States, Canada, Australia, New Zealand, the Philippines, and Europe. The company has a P/E ratio of 87.76.

The average volume for James Hardie Industries has been 6,900 shares per day over the past 30 days. James Hardie Industries has a market cap of $3.9 billion and is part of the materials & construction industry. Shares are down 6.8% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates James Hardie Industries as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, 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 a generally disappointing performance in the stock itself, deteriorating net income and premium valuation.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 4.5%. Since the same quarter one year prior, revenues slightly increased by 5.7%. 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.
  • JHX 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.43, which illustrates the ability to avoid short-term cash problems.
  • 35.19% is the gross profit margin for JAMES HARDIE INDUSTRIES PLC which we consider to be strong. Regardless of JHX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, JHX's net profit margin of -21.26% significantly underperformed when compared to the industry average.
  • In its most recent trading session, JHX 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, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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

Full Circle Capital Corp BDC

Dividend Yield: 11.20%

Full Circle Capital Corp BDC (NASDAQ: FULL) shares currently have a dividend yield of 11.20%.

Full Circle Capital Corporation is a business development company and operates as an externally managed non-diversified closed-end management investment company. The company has a P/E ratio of 48.56.

The average volume for Full Circle Capital Corp BDC has been 54,200 shares per day over the past 30 days. Full Circle Capital Corp BDC has a market cap of $62.5 million and is part of the financial services industry. Shares are up 11.1% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Full Circle Capital Corp BDC as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. 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:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.5%. Since the same quarter one year prior, revenues slightly increased by 7.8%. 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 FULL CIRCLE CAPITAL CORP is rather high; currently it is at 61.87%. Regardless of FULL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FULL's net profit margin of 49.15% significantly outperformed against the industry.
  • FULL CIRCLE CAPITAL CORP's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FULL CIRCLE CAPITAL CORP reported lower earnings of $0.44 versus $0.46 in the prior year. This year, the market expects an improvement in earnings ($0.78 versus $0.44).
  • 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 greatly underperformed compared to the Capital Markets industry average. The net income has decreased by 2.8% when compared to the same quarter one year ago, dropping from $1.52 million to $1.48 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. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, FULL CIRCLE CAPITAL CORP underperformed against that of the industry average and is significantly less than that of 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.

San Juan Basin Royalty

Dividend Yield: 7.50%

San Juan Basin Royalty (NYSE: SJT) shares currently have a dividend yield of 7.50%.

San Juan Basin Royalty Trust operates as an express trust. The company has a 75% net overriding royalty interest carved out of Burlington's oil and gas leasehold interests (the underlying properties) in properties located in the San Juan Basin in northwestern New Mexico. The company has a P/E ratio of 44.78.

The average volume for San Juan Basin Royalty has been 93,500 shares per day over the past 30 days. San Juan Basin Royalty has a market cap of $772.3 million and is part of the energy industry. Shares are up 23.6% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates San Juan Basin Royalty 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, expanding profit margins and increase in stock price during the past year. 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 premium valuation.

Highlights from the ratings report include:
  • SJT 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.
  • The gross profit margin for SAN JUAN BASIN ROYALTY TR is currently very high, coming in at 100.00%. SJT has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, SJT's net profit margin of 92.48% significantly outperformed against the industry.
  • SJT, with its very weak revenue results, has greatly underperformed against the industry average of 10.2%. Since the same quarter one year prior, revenues plummeted by 75.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 76.8% when compared to the same quarter one year ago, falling from $14.63 million to $3.40 million.

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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