4 Hold-Rated Dividend Stocks: UDR, MFA, DCT, VIV

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."

UDR

Dividend Yield: 4.10%

UDR (NYSE: UDR) shares currently have a dividend yield of 4.10%.

UDR, Inc. is an independent real estate investment trust. The firm invests in the real estate markets of the United States. It owns, operates, acquires, renovates, develops, redevelops, and manages multifamily apartment communities.

The average volume for UDR has been 1,944,900 shares per day over the past 30 days. UDR has a market cap of $5.7 billion and is part of the real estate industry. Shares are down 4.4% year to date as of the close of trading on Thursday.

TheStreet Ratings rates UDR as a hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • UDR 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, UDR INC continued to lose money by earning -$0.25 versus -$0.67 in the prior year. This year, the market expects an improvement in earnings ($0.04 versus -$0.25).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.6%. Since the same quarter one year prior, revenues slightly increased by 8.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for UDR INC is rather low; currently it is at 16.43%. Regardless of UDR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, UDR's net profit margin of 2.67% is significantly lower than 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 96.5% when compared to the same quarter one year ago, falling from $150.35 million to $5.19 million.

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

MFA Financial

Dividend Yield: 12.20%

MFA Financial (NYSE: MFA) shares currently have a dividend yield of 12.20%.

MFA Financial, Inc., a real estate investment trust (REIT), invests in residential agency and non-agency mortgage-backed securities (MBS). The company has a P/E ratio of 9.16.

The average volume for MFA Financial has been 3,778,200 shares per day over the past 30 days. MFA Financial has a market cap of $2.6 billion and is part of the real estate industry. Shares are down 10.7% year to date as of the close of trading on Thursday.

TheStreet Ratings rates MFA Financial as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The gross profit margin for MFA FINANCIAL INC is currently very high, coming in at 91.33%. Regardless of MFA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MFA's net profit margin of 60.36% significantly outperformed against the industry.
  • MFA, with its decline in revenue, underperformed when compared the industry average of 10.6%. Since the same quarter one year prior, revenues slightly dropped by 0.2%. 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, MFA FINANCIAL INC's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $70.08 million or 13.26% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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

DCT Industrial

Dividend Yield: 4.10%

DCT Industrial (NYSE: DCT) shares currently have a dividend yield of 4.10%.

DCT Industrial Trust Inc. operates as a publicly owned real estate investment trust. The firm provides its services to companies. Through its fund, it engages in the ownership, operation, and development of real estate properties.

The average volume for DCT Industrial has been 4,878,800 shares per day over the past 30 days. DCT Industrial has a market cap of $2.1 billion and is part of the real estate industry. Shares are up 4.8% year to date as of the close of trading on Thursday.

TheStreet Ratings rates DCT Industrial as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in stock price during the past year and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

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 20.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 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, DCT INDUSTRIAL TRUST INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for DCT INDUSTRIAL TRUST INC is rather low; currently it is at 16.12%. Regardless of DCT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, DCT's net profit margin of 14.56% is significantly lower than 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.

Telefonica Brasil S.A

Dividend Yield: 7.80%

Telefonica Brasil S.A (NYSE: VIV) shares currently have a dividend yield of 7.80%.

Telefonica Brasil S.A. provides fixed-line telecommunications services to residential and commercial customers in Brazil. The company has a P/E ratio of 6.48.

The average volume for Telefonica Brasil S.A has been 1,438,600 shares per day over the past 30 days. Telefonica Brasil S.A has a market cap of $22.2 billion and is part of the telecommunications industry. Shares are down 17.7% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Telefonica Brasil S.A 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 attractive valuation levels. 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:
  • VIV's debt-to-equity ratio is very low at 0.21 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 1.10, which illustrates the ability to avoid short-term cash problems.
  • VIV, with its decline in revenue, slightly underperformed the industry average of 2.3%. Since the same quarter one year prior, revenues slightly dropped by 5.0%. Weakness in the company's revenue seems to have hurt the 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. In comparison to the other companies in the Diversified Telecommunication Services industry and the overall market, TELEFONICA BRASIL SA'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 declined marginally to $798.49 million or 4.83% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, TELEFONICA BRASIL SA 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.

Other helpful dividend tools from TheStreet:

null

More from Markets

Stocks Turn Lower as 10-Year Yield Hits 3%

Stocks Turn Lower as 10-Year Yield Hits 3%

Apple Suppliers Slide After European, Asian Chipmakers Echo Smartphone Concerns

Apple Suppliers Slide After European, Asian Chipmakers Echo Smartphone Concerns

Tuesday's Market Movers: CAT, UTX, KO, MMM

Tuesday's Market Movers: CAT, UTX, KO, MMM

Wall Street Is Totally Forgetting Apple Will Be Giving Away Tons of Cash in 2018

Wall Street Is Totally Forgetting Apple Will Be Giving Away Tons of Cash in 2018

Vivendi Slides After Reports Vincent Bollore Questioned in Corruption Probe

Vivendi Slides After Reports Vincent Bollore Questioned in Corruption Probe