Top 5 Yielding Hold-Rated Stocks: ACC, MFA, POM, DRE, DBD

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."

American Campus Communities

Dividend Yield: 4.40%

American Campus Communities (NYSE: ACC) shares currently have a dividend yield of 4.40%.

American Campus Communities, Inc. is an independent equity real estate investment trust. The firm invests in the real estate markets of the United States. It primarily engages in developing, owning, and managing high-quality student housing communities. The company has a P/E ratio of 69.94.

The average volume for American Campus Communities has been 800,600 shares per day over the past 30 days. American Campus Communities has a market cap of $3.4 billion and is part of the real estate industry. Shares are down 27.4% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates American Campus Communities as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and unimpressive growth in net income.

Highlights from the ratings report include:
  • ACC's very impressive revenue growth greatly exceeded the industry average of 10.7%. Since the same quarter one year prior, revenues leaped by 53.3%. 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 $45.73 million or 43.77% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 5.48%.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, AMERICAN CAMPUS COMMUNITIES underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • AMERICAN CAMPUS COMMUNITIES 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 managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, AMERICAN CAMPUS COMMUNITIES reported lower earnings of $0.57 versus $0.58 in the prior year. For the next year, the market is expecting a contraction of 7.0% in earnings ($0.53 versus $0.57).
  • 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 34.7% when compared to the same quarter one year ago, falling from $12.33 million to $8.05 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 9.11.

The average volume for MFA Financial has been 3,548,600 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 10.2% year to date as of the close of trading on Wednesday.

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 10.7%. 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.

Pepco Holdings

Dividend Yield: 5.80%

Pepco Holdings (NYSE: POM) shares currently have a dividend yield of 5.80%.

Pepco Holdings, Inc., through its subsidiaries, engages in the transmission, distribution, and supply of electricity. The company also distributes and supplies natural gas.

The average volume for Pepco Holdings has been 2,280,800 shares per day over the past 30 days. Pepco Holdings has a market cap of $4.6 billion and is part of the utilities industry. Shares are down 5.5% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Pepco Holdings as a hold. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:
  • Net operating cash flow has slightly increased to $111.00 million or 9.90% when compared to the same quarter last year. Despite an increase in cash flow, PEPCO HOLDINGS INC's average is still marginally south of the industry average growth rate of 17.92%.
  • POM, with its decline in revenue, underperformed when compared the industry average of 16.0%. Since the same quarter one year prior, revenues slightly dropped by 1.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • PEPCO HOLDINGS INC's earnings per share declined by 30.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PEPCO HOLDINGS INC increased its bottom line by earning $1.17 versus $1.14 in the prior year. For the next year, the market is expecting a contraction of 4.3% in earnings ($1.12 versus $1.17).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Electric Utilities industry and the overall market, PEPCO HOLDINGS INC's return on equity significantly trails that of both the industry average and 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 Electric Utilities industry. The net income has significantly decreased by 32.3% when compared to the same quarter one year ago, falling from $62.00 million to $42.00 million.

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

Duke Realty

Dividend Yield: 4.70%

Duke Realty (NYSE: DRE) shares currently have a dividend yield of 4.70%.

Duke Realty Corporation operates as a real estate investment trust (REIT) in the United States. It offers leasing, property and asset management, development, construction, build-to-suit, and other tenant-related services.

The average volume for Duke Realty has been 2,483,900 shares per day over the past 30 days. Duke Realty has a market cap of $4.7 billion and is part of the real estate industry. Shares are up 5.6% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Duke Realty as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and good cash flow from operations. 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 495.7% when compared to the same quarter one year prior, rising from -$17.40 million to $68.85 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.7%. Since the same quarter one year prior, revenues slightly increased by 6.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • DUKE REALTY CORP has improved earnings per share by 41.7% 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, DUKE REALTY CORP reported poor results of -$0.52 versus -$0.27 in the prior year. This year, the market expects an improvement in earnings (-$0.10 versus -$0.52).
  • 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, DUKE REALTY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for DUKE REALTY CORP is rather low; currently it is at 16.04%. Regardless of DRE'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 24.81% trails 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.

Diebold Incorporated

Dividend Yield: 4.10%

Diebold Incorporated (NYSE: DBD) shares currently have a dividend yield of 4.10%.

Diebold, Incorporated provides integrated self-service delivery and security systems and services primarily to the financial, commercial, government, and retail markets worldwide.

The average volume for Diebold Incorporated has been 723,000 shares per day over the past 30 days. Diebold Incorporated has a market cap of $2.2 billion and is part of the computer software & services industry. Shares are down 6.7% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Diebold Incorporated as a hold. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • DBD, with its decline in revenue, slightly underperformed the industry average of 0.6%. Since the same quarter one year prior, revenues slightly dropped by 4.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • DIEBOLD INC 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. 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, DIEBOLD INC reported lower earnings of $1.24 versus $2.26 in the prior year. This year, the market expects an improvement in earnings ($1.33 versus $1.24).
  • The share price of DIEBOLD INC has not done very well: it is down 13.04% 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.
  • Net operating cash flow has significantly decreased to -$31.70 million or 298.72% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 Computers & Peripherals industry. The net income has significantly decreased by 515.3% when compared to the same quarter one year ago, falling from $25.29 million to -$105.04 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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