Hold-Rated Dividend Stocks In The Top 5: WIN, NS, NRF, FTR, PM

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."

Windstream

Dividend Yield: 12.50%

Windstream (NASDAQ: WIN) shares currently have a dividend yield of 12.50%.

Windstream Corporation provides communications and technology solutions in the United States. The company offers managed services and cloud computing services to businesses, as well as broadband, voice, and video services to consumers primarily in rural markets. The company has a P/E ratio of 33.33.

The average volume for Windstream has been 7,472,300 shares per day over the past 30 days. Windstream has a market cap of $4.7 billion and is part of the telecommunications industry. Shares are down 3.4% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Windstream as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins 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 a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has slightly increased to $408.00 million or 2.51% when compared to the same quarter last year. In addition, WINDSTREAM CORP has also modestly surpassed the industry average cash flow growth rate of -1.90%.
  • The gross profit margin for WINDSTREAM CORP is rather high; currently it is at 53.43%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 2.63% trails the industry average.
  • 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 Diversified Telecommunication Services industry and the overall market on the basis of return on equity, WINDSTREAM CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Diversified Telecommunication Services industry. The net income has decreased by 22.1% when compared to the same quarter one year ago, dropping from $51.00 million to $39.70 million.
  • The debt-to-equity ratio is very high at 9.45 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, WIN has a quick ratio of 0.53, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

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

NuStar Energy L.P

Dividend Yield: 10.60%

NuStar Energy L.P (NYSE: NS) shares currently have a dividend yield of 10.60%.

NuStar Energy L.P. engages in the terminalling, storage, and transportation of petroleum products primarily in the United States and the Netherlands. The company operates in three segments: Storage, Transportation, and Asphalt and Fuels Marketing. The company has a P/E ratio of 79.35.

The average volume for NuStar Energy L.P has been 329,800 shares per day over the past 30 days. NuStar Energy L.P has a market cap of $3.2 billion and is part of the energy industry. Shares are down 2.9% year to date as of the close of trading on Thursday.

TheStreet Ratings rates NuStar Energy L.P as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income and impressive record of earnings per share growth. 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 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 113.4% when compared to the same quarter one year prior, rising from -$246.74 million to $32.97 million.
  • NUSTAR ENERGY LP 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 ENERGY LP swung to a loss, reporting -$2.79 versus $2.79 in the prior year. This year, the market expects an improvement in earnings ($1.11 versus -$2.79).
  • NS, with its very weak revenue results, has greatly underperformed against the industry average of 10.1%. Since the same quarter one year prior, revenues plummeted by 52.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for NUSTAR ENERGY LP is rather low; currently it is at 15.52%. Regardless of NS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.64% trails the industry average.
  • NS has underperformed the S&P 500 Index, declining 20.82% from its price level of one year ago. 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.

Northstar Realty Finance Corporation

Dividend Yield: 9.20%

Northstar Realty Finance Corporation (NYSE: NRF) shares currently have a dividend yield of 9.20%.

NorthStar Realty Finance Corp., a real estate investment trust (REIT), operates as a commercial real estate (CRE) investment and asset management company in the United States.

The average volume for Northstar Realty Finance Corporation has been 4,199,900 shares per day over the past 30 days. Northstar Realty Finance Corporation has a market cap of $2.1 billion and is part of the real estate industry. Shares are up 24.6% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Northstar Realty Finance Corporation as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • NRF's very impressive revenue growth greatly exceeded the industry average of 10.6%. Since the same quarter one year prior, revenues leaped by 59.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 90.32% and other important driving factors, this stock has surged by 63.32% 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.
  • 47.45% is the gross profit margin for NORTHSTAR REALTY FINANCE CP which we consider to be strong. Regardless of NRF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NRF's net profit margin of 0.19% is significantly lower than the industry average.
  • 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, NORTHSTAR REALTY FINANCE CP's return on equity significantly trails that of both the industry average and 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.

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 41.27.

The average volume for Frontier Communications Corp Class B has been 9,579,400 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 6.1% year to date as of the close of trading on Thursday.

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 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 2.3%. 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.

Philip Morris International

Dividend Yield: 4.10%

Philip Morris International (NYSE: PM) shares currently have a dividend yield of 4.10%.

Philip Morris International Inc., through its subsidiaries, manufactures and sells cigarettes and other tobacco products. The company has a P/E ratio of 16.27.

The average volume for Philip Morris International has been 4,993,600 shares per day over the past 30 days. Philip Morris International has a market cap of $135.6 billion and is part of the tobacco industry. Shares are up 0.2% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Philip Morris International as a hold. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and weak operating cash flow.

Highlights from the ratings report include:
  • PHILIP MORRIS INTERNATIONAL' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, PHILIP MORRIS INTERNATIONAL increased its bottom line by earning $5.18 versus $4.84 in the prior year. This year, the market expects an improvement in earnings ($5.44 versus $5.18).
  • The gross profit margin for PHILIP MORRIS INTERNATIONAL is rather high; currently it is at 68.35%. Regardless of PM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PM's net profit margin of 26.82% compares favorably to the industry average.
  • PM, with its decline in revenue, slightly underperformed the industry average of 2.1%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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 the Tobacco industry average. The net income has decreased by 8.3% when compared to the same quarter one year ago, dropping from $2,317.00 million to $2,124.00 million.
  • Net operating cash flow has declined marginally to $3,137.00 million or 9.85% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, PHILIP MORRIS INTERNATIONAL 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.

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