5 Hold-Rated Dividend Stocks: SPH, NSH, RNO, DX, MTR

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."

Suburban Propane Partners

Dividend Yield: 7.60%

Suburban Propane Partners (NYSE: SPH) shares currently have a dividend yield of 7.60%.

Suburban Propane Partners, L.P., through its subsidiaries, engages in the retail marketing and distribution of propane, fuel oil, and refined fuels. The company has a P/E ratio of 62.74.

The average volume for Suburban Propane Partners has been 194,000 shares per day over the past 30 days. Suburban Propane Partners has a market cap of $2.8 billion and is part of the utilities industry. Shares are up 15.6% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Suburban Propane Partners as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • SPH's very impressive revenue growth greatly exceeded the industry average of 21.2%. Since the same quarter one year prior, revenues leaped by 61.9%. 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.
  • Net operating cash flow has increased to $66.51 million or 18.33% when compared to the same quarter last year. In addition, SUBURBAN PROPANE PRTNRS -LP has also modestly surpassed the industry average cash flow growth rate of 13.64%.
  • Even though the current debt-to-equity ratio is 1.14, it is still below the industry average, suggesting that this level of debt is acceptable within the Gas Utilities industry. Despite the fact that SPH's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.15 is high and demonstrates strong liquidity.
  • 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. When compared to other companies in the Gas Utilities industry and the overall market, SUBURBAN PROPANE PRTNRS -LP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for SUBURBAN PROPANE PRTNRS -LP is currently extremely low, coming in at 8.36%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -15.53% 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.

NuStar GP Holdings

Dividend Yield: 9.20%

NuStar GP Holdings (NYSE: NSH) shares currently have a dividend yield of 9.20%.

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 21.15.

The average volume for NuStar GP Holdings has been 200,400 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 14.5% 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 good cash flow from operations. 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 6.6%. 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.
  • NSH's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.41 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, NUSTAR GP HOLDINGS LLC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • NSH has underperformed the S&P 500 Index, declining 22.67% 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.

Rhino Resource Partners

Dividend Yield: 14.10%

Rhino Resource Partners (NYSE: RNO) shares currently have a dividend yield of 14.10%.

Rhino Resource Partners LP, together with its subsidiaries, produces, processes, and sells various grades of steam and metallurgical coal from surface and underground mines in the United States. The company has a P/E ratio of 15.05.

The average volume for Rhino Resource Partners has been 33,900 shares per day over the past 30 days. Rhino Resource Partners has a market cap of $194.3 million and is part of the metals & mining industry. Shares are down 6.7% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Rhino Resource Partners as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $18.46 million or 13.28% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -15.97%.
  • RNO, with its decline in revenue, underperformed when compared the industry average of 6.6%. Since the same quarter one year prior, revenues fell by 25.7%. 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 against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 54.6% when compared to the same quarter one year ago, falling from $13.00 million to $5.90 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, RHINO RESOURCE PARTNERS LP's return on equity is significantly below that of the industry average and is below 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.

Dynex Capital

Dividend Yield: 14.40%

Dynex Capital (NYSE: DX) shares currently have a dividend yield of 14.40%.

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 5.18.

The average volume for Dynex Capital has been 498,600 shares per day over the past 30 days. Dynex Capital has a market cap of $443.1 million and is part of the real estate industry. Shares are down 15.6% year to date as of the close of trading on Tuesday.

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:
  • DX's revenue growth has slightly outpaced the industry average of 10.7%. 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 12.5% in earnings ($1.19 versus $1.36).
  • DX has underperformed the S&P 500 Index, declining 23.81% 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.

Mesa Royalty

Dividend Yield: 11.80%

Mesa Royalty (NYSE: MTR) shares currently have a dividend yield of 11.80%.

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 13.80.

The average volume for Mesa Royalty has been 3,400 shares per day over the past 30 days. Mesa Royalty has a market cap of $43.5 million and is part of the financial services industry. Shares are up 21.7% year to date as of the close of trading on Tuesday.

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, deteriorating net income 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 8.81, 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 94.63% significantly outperformed against the industry.
  • MTR, with its decline in revenue, underperformed when compared the industry average of 6.6%. Since the same quarter one year prior, revenues fell by 25.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The share price of MESA ROYALTY TRUST has not done very well: it is down 10.60% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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 25.5% 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.

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