5 Hold-Rated Dividend Stocks Taking The Lead: CNSL, LGCY, NYMT, CRT, EROC

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."

Consolidated Communications

Dividend Yield: 9.30%

Consolidated Communications (NASDAQ: CNSL) shares currently have a dividend yield of 9.30%.

Consolidated Communications Holdings, Inc., together with its subsidiaries, provides telecommunications services to residential and business customers in Illinois, Texas, Pennsylvania, California, Kansas, and Missouri. The company has a P/E ratio of 38.02.

The average volume for Consolidated Communications has been 175,300 shares per day over the past 30 days. Consolidated Communications has a market cap of $671.1 million and is part of the telecommunications industry. Shares are up 5.3% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Consolidated Communications as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:
  • CNSL's very impressive revenue growth greatly exceeded the industry average of 2.6%. Since the same quarter one year prior, revenues leaped by 74.8%. 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 Diversified Telecommunication Services industry. The net income increased by 230.0% when compared to the same quarter one year prior, rising from $2.79 million to $9.19 million.
  • CONSOLIDATED COMM HLDGS 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, CONSOLIDATED COMM HLDGS INC reported lower earnings of $0.13 versus $0.88 in the prior year. This year, the market expects an improvement in earnings ($0.86 versus $0.13).
  • Net operating cash flow has declined marginally to $28.06 million or 2.16% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, CONSOLIDATED COMM HLDGS INC has marginally lower results.
  • The debt-to-equity ratio is very high at 10.02 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, CNSL has a quick ratio of 0.55, 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.

Legacy Reserves

Dividend Yield: 8.60%

Legacy Reserves (NASDAQ: LGCY) shares currently have a dividend yield of 8.60%.

Legacy Reserves LP, an independent oil and natural gas limited partnership, engages in the acquisition and development of oil and natural gas properties primarily located in the Permian Basin, Mid-Continent, and Rocky Mountain regions of the United States.

The average volume for Legacy Reserves has been 156,800 shares per day over the past 30 days. Legacy Reserves has a market cap of $1.6 billion and is part of the energy industry. Shares are up 13.2% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Legacy Reserves 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 feeble growth in the company's earnings per share, deteriorating net income and generally higher debt management risk.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 50.52% to $67.39 million when compared to the same quarter last year. In addition, LEGACY RESERVES LP has also vastly surpassed the industry average cash flow growth rate of -15.97%.
  • The gross profit margin for LEGACY RESERVES LP is rather high; currently it is at 54.96%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, LGCY's net profit margin of 15.13% compares favorably to the industry average.
  • LGCY, with its decline in revenue, slightly underperformed the industry average of 6.6%. Since the same quarter one year prior, revenues fell by 12.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The debt-to-equity ratio of 1.36 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, LGCY maintains a poor quick ratio of 0.73, which illustrates the inability to avoid short-term cash problems.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, LEGACY RESERVES LP'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.

New York Mortgage

Dividend Yield: 17.70%

New York Mortgage (NASDAQ: NYMT) shares currently have a dividend yield of 17.70%.

New York Mortgage Trust, Inc., a real estate investment trust (REIT), engages in acquiring, investing in, financing, and managing mortgage-related and financial assets in the United States. The company has a P/E ratio of 7.44.

The average volume for New York Mortgage has been 997,000 shares per day over the past 30 days. New York Mortgage has a market cap of $388.9 million and is part of the real estate industry. Shares are down 3.5% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates New York Mortgage as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including poor profit margins, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • NYMT's very impressive revenue growth greatly exceeded the industry average of 10.7%. Since the same quarter one year prior, revenues leaped by 162.8%. 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 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 on the basis of return on equity, NEW YORK MORTGAGE TRUST INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The share price of NEW YORK MORTGAGE TRUST INC has not done very well: it is down 9.58% 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.
  • The gross profit margin for NEW YORK MORTGAGE TRUST INC is rather low; currently it is at 20.46%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 16.60% significantly 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.

Cross Timbers Royalty

Dividend Yield: 10.00%

Cross Timbers Royalty (NYSE: CRT) shares currently have a dividend yield of 10.00%.

Cross Timbers Royalty Trust operates as an express trust in the United States. The company's function is to collect and distribute monthly net profits income from royalty interests and overriding royalty interests to unitholders. The company has a P/E ratio of 12.86.

The average volume for Cross Timbers Royalty has been 14,500 shares per day over the past 30 days. Cross Timbers Royalty has a market cap of $170.5 million and is part of the energy industry. Shares are up 6% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Cross Timbers 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:
  • CRT 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 11.22, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for CROSS TIMBERS ROYALTY TRUST is currently very high, coming in at 100.00%. CRT has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, CRT's net profit margin of 96.06% significantly outperformed against the industry.
  • CRT, with its decline in revenue, underperformed when compared the industry average of 6.6%. Since the same quarter one year prior, revenues fell by 18.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, CRT has underperformed the S&P 500 Index, declining 19.90% 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.
  • CROSS TIMBERS ROYALTY TRUST's earnings per share declined by 18.8% 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, CROSS TIMBERS ROYALTY TRUST reported lower earnings of $2.48 versus $2.99 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.

Eagle Rock Energy Partners

Dividend Yield: 14.30%

Eagle Rock Energy Partners (NASDAQ: EROC) shares currently have a dividend yield of 14.30%.

Eagle Rock Energy Partners, L.P., together with its subsidiaries, engages in gathering, compressing, treating, processing, transporting, marketing, and trading natural gas, as well as fractionating and transporting natural gas liquids (NGL).

The average volume for Eagle Rock Energy Partners has been 836,200 shares per day over the past 30 days. Eagle Rock Energy Partners has a market cap of $981.7 million and is part of the energy industry. Shares are down 28.9% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Eagle Rock Energy Partners as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.6%. Since the same quarter one year prior, revenues rose by 13.4%. 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 significantly increased by 181.94% to $64.23 million when compared to the same quarter last year. In addition, EAGLE ROCK ENERGY PARTNRS LP has also vastly surpassed the industry average cash flow growth rate of -15.97%.
  • EAGLE ROCK ENERGY PARTNRS 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, EAGLE ROCK ENERGY PARTNRS LP swung to a loss, reporting -$1.11 versus $0.38 in the prior year. This year, the market expects an improvement in earnings (-$0.07 versus -$1.11).
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, EAGLE ROCK ENERGY PARTNRS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for EAGLE ROCK ENERGY PARTNRS LP is currently lower than what is desirable, coming in at 29.14%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 5.00% trails 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.

Other helpful dividend tools from TheStreet:

null

More from Markets

Jim Cramer: If You're Afraid of the 10-Year Yield, Go to Cash

Jim Cramer: If You're Afraid of the 10-Year Yield, Go to Cash

Eli Lilly CEO Expresses Confidence in New Rheumatoid Arthritis Drug

Eli Lilly CEO Expresses Confidence in New Rheumatoid Arthritis Drug

Video: Jim Cramer on Rising Interest Rates, Trade Worries & Caterpillar

Video: Jim Cramer on Rising Interest Rates, Trade Worries & Caterpillar

Stocks Trade Lower as 10-Year Yield Hits 3%

Stocks Trade 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