Best 5 Yielding Hold-Rated Stocks: MTR, FULL, FGP, DX, DSWL

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."

Mesa Royalty

Dividend Yield: 12.30%

Mesa Royalty (NYSE: MTR) shares currently have a dividend yield of 12.30%.

Mesa Royalty Trust holds net overriding royalty interests in various oil and gas producing properties in the United States. It has interests in properties located in the Hugoton field of Kansas; the San Juan Basin field of New Mexico and Colorado; and the Yellow Creek field of Wyoming. The company has a P/E ratio of 13.21.

The average volume for Mesa Royalty has been 3,200 shares per day over the past 30 days. Mesa Royalty has a market cap of $41.6 million and is part of the financial services industry. Shares are up 19.1% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Mesa 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 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 and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • MTR 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 6.33, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for MESA ROYALTY TRUST is currently very high, coming in at 100.00%. MTR has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, MTR's net profit margin of 94.89% significantly outperformed against the industry.
  • MTR, with its decline in revenue, slightly underperformed the industry average of 10.1%. Since the same quarter one year prior, revenues fell by 18.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, MTR has underperformed the S&P 500 Index, declining 21.99% 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.
  • MESA ROYALTY TRUST's earnings per share declined by 17.2% 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 two years. During the past fiscal year, MESA ROYALTY TRUST reported lower earnings of $1.93 versus $2.96 in the prior year.

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: 11.30%

Full Circle Capital Corp BDC (NASDAQ: FULL) shares currently have a dividend yield of 11.30%.

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 48.12.

The average volume for Full Circle Capital Corp BDC has been 53,300 shares per day over the past 30 days. Full Circle Capital Corp BDC has a market cap of $61.9 million and is part of the financial services industry. Shares are up 10.1% year to date as of the close of trading on Wednesday.

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.

Ferrellgas Partners

Dividend Yield: 8.80%

Ferrellgas Partners (NYSE: FGP) shares currently have a dividend yield of 8.80%.

Ferrellgas Partners, L.P. engages in the distribution and sale of propane, and related equipment and supplies primarily in the United States. It transports propane to propane distribution locations, tanks on customers' premises, or to portable propane tanks delivered to retailers. The company has a P/E ratio of 37.30.

The average volume for Ferrellgas Partners has been 222,600 shares per day over the past 30 days. Ferrellgas Partners has a market cap of $1.8 billion and is part of the energy industry. Shares are up 33% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Ferrellgas Partners 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including relatively poor performance when compared with the S&P 500 during the past year and poor profit margins.

Highlights from the ratings report include:
  • FERRELLGAS PARTNERS -LP 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, FERRELLGAS PARTNERS -LP continued to lose money by earning -$0.14 versus -$0.58 in the prior year. This year, the market expects an improvement in earnings ($0.69 versus -$0.14).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Gas Utilities industry. The net income increased by 114.7% when compared to the same quarter one year prior, rising from $20.81 million to $44.68 million.
  • FGP, with its decline in revenue, underperformed when compared the industry average of 21.2%. Since the same quarter one year prior, revenues slightly dropped by 4.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for FERRELLGAS PARTNERS -LP is rather low; currently it is at 19.15%. Regardless of FGP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, FGP's net profit margin of 7.40% compares favorably to the industry average.
  • In its most recent trading session, FGP 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. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.

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

Dynex Capital

Dividend Yield: 14.70%

Dynex Capital (NYSE: DX) shares currently have a dividend yield of 14.70%.

Dynex Capital, Inc., a mortgage real estate investment trust (REIT), invests in mortgage assets in the United States. The company has a P/E ratio of 5.09.

The average volume for Dynex Capital has been 542,000 shares per day over the past 30 days. Dynex Capital has a market cap of $435.3 million and is part of the real estate industry. Shares are down 15.6% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Dynex Capital 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:
  • The revenue growth came in higher than the industry average of 10.6%. Since the same quarter one year prior, revenues rose by 20.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, DYNEX CAPITAL INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for DYNEX CAPITAL INC is currently very high, coming in at 89.46%. Regardless of DX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DX's net profit margin of 87.53% significantly outperformed against the industry.
  • DYNEX CAPITAL 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 year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, DYNEX CAPITAL INC increased its bottom line by earning $1.36 versus $1.05 in the prior year. For the next year, the market is expecting a contraction of 12.1% in earnings ($1.20 versus $1.36).
  • DX has underperformed the S&P 500 Index, declining 19.31% 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.

Deswell Industries

Dividend Yield: 7.80%

Deswell Industries (NASDAQ: DSWL) shares currently have a dividend yield of 7.80%.

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 12,900 shares per day over the past 30 days. Deswell Industries has a market cap of $41.5 million and is part of the consumer non-durables industry. Shares are up 6.7% year to date as of the close of trading on Wednesday.

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. The firm also exceeded the industry average cash flow growth rate of -10.41%.
  • DSWL, with its decline in revenue, underperformed when compared the industry average of 2.6%. 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.

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