What To Hold: Top 4 Hold-Rated Dividend Stocks: NRP, BGCP, PGH, MCEP

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."

Natural Resources Partners L.P

Dividend Yield: 10.90%

Natural Resources Partners L.P (NYSE: NRP) shares currently have a dividend yield of 10.90%.

Natural Resource Partners L.P., through its subsidiaries, engages in the ownership, management, and leasing of mineral properties in the United States. It owns coal reserves in Appalachia, the Illinois Basin, and the Western United States, as well as lignite reserves in the Gulf Coast region. The company has a P/E ratio of 11.04.

The average volume for Natural Resources Partners L.P has been 239,700 shares per day over the past 30 days. Natural Resources Partners L.P has a market cap of $2.2 billion and is part of the metals & mining industry. Shares are up 8.1% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Natural Resources Partners L.P 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 a generally disappointing performance in the stock itself, generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:
  • The gross profit margin for NATURAL RESOURCE PARTNERS LP is currently very high, coming in at 93.43%. Regardless of NRP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NRP's net profit margin of 52.03% significantly outperformed against the industry.
  • 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 other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, NATURAL RESOURCE PARTNERS LP has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • NRP, with its decline in revenue, slightly underperformed the industry average of 10.3%. Since the same quarter one year prior, revenues fell by 12.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Currently the debt-to-equity ratio of 1.75 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Regardless of the company's weak debt-to-equity ratio, NRP has managed to keep a strong quick ratio of 1.70, which demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has declined marginally to $79.74 million or 3.37% when compared to the same quarter last year. Despite a decrease in cash flow NATURAL RESOURCE PARTNERS LP is still fairing well by exceeding its industry average cash flow growth rate of -17.92%.

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

BGC Partners

Dividend Yield: 8.60%

BGC Partners (NASDAQ: BGCP) shares currently have a dividend yield of 8.60%.

BGC Partners, Inc. operates as a brokerage company, primarily servicing the wholesale financial and real estate markets. It operates through two segments, Financial Services and Real Estate Services. The company has a P/E ratio of 16.88.

The average volume for BGC Partners has been 1,325,900 shares per day over the past 30 days. BGC Partners has a market cap of $763.2 million and is part of the financial services industry. Shares are up 61% year to date as of the close of trading on Thursday.

TheStreet Ratings rates BGC Partners as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:
  • 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. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 1660.3% when compared to the same quarter one year prior, rising from $1.96 million to $34.47 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.4%. Since the same quarter one year prior, revenues slightly increased by 4.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, BGC PARTNERS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • BGC PARTNERS INC 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, BGC PARTNERS INC reported lower earnings of $0.16 versus $0.19 in the prior year. This year, the market expects an improvement in earnings ($0.49 versus $0.16).

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

Pengrowth Energy

Dividend Yield: 8.30%

Pengrowth Energy (NYSE: PGH) shares currently have a dividend yield of 8.30%.

Pengrowth Energy Corporation engages in the acquisition, exploration, development, and production of oil and natural gas reserves in Canada.

The average volume for Pengrowth Energy has been 1,582,800 shares per day over the past 30 days. Pengrowth Energy has a market cap of $2.9 billion and is part of the energy industry. Shares are up 9.3% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Pengrowth Energy 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 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:
  • The revenue growth came in higher than the industry average of 10.3%. Since the same quarter one year prior, revenues slightly increased by 2.2%. 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 current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels.
  • The gross profit margin for PENGROWTH ENERGY CORP is rather high; currently it is at 62.40%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -14.66% is in-line with 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 245.4% when compared to the same quarter one year ago, falling from $36.77 million to -$53.45 million.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, PENGROWTH ENERGY CORP'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.

Mid-Con Energy Partners

Dividend Yield: 8.70%

Mid-Con Energy Partners (NASDAQ: MCEP) shares currently have a dividend yield of 8.70%.

Mid-Con Energy Partners, LP engages in the acquisition, exploitation, development, and production of oil and natural gas properties in North America. The company has a P/E ratio of 22.76.

The average volume for Mid-Con Energy Partners has been 71,500 shares per day over the past 30 days. Mid-Con Energy Partners has a market cap of $456.7 million and is part of the energy industry. Shares are up 26.6% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Mid-Con Energy Partners as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, premium valuation and relatively poor performance when compared with the S&P 500 during the past year.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $14.61 million or 41.52% when compared to the same quarter last year. In addition, MID-CON ENERGY PARTNERS -LP has also vastly surpassed the industry average cash flow growth rate of -17.92%.
  • The gross profit margin for MID-CON ENERGY PARTNERS -LP is currently very high, coming in at 72.80%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, MCEP's net profit margin of 46.26% significantly outperformed against the industry.
  • MID-CON ENERGY PARTNERS -LP 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. 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, MID-CON ENERGY PARTNERS -LP increased its bottom line by earning $1.63 versus $0.51 in the prior year. This year, the market expects an improvement in earnings ($2.07 versus $1.63).
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 53.0% when compared to the same quarter one year ago, falling from $22.43 million to $10.54 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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