Best 5 Yielding Hold-Rated Stocks: MTR, QCCO, EDUC, MCC, VOC

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."

Mesa Royalty

Dividend Yield: 12.10%

Mesa Royalty (NYSE: MTR) shares currently have a dividend yield of 12.10%.

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 13.43.

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 $42.3 million and is part of the financial services industry. Shares are up 17.5% year to date as of the close of trading on Thursday.

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 increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share and deteriorating net income.

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 6.5%. 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 change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 25.9% when compared to the same quarter one year ago, falling from $0.88 million to $0.65 million.
  • 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.

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QC Holdings

Dividend Yield: 8.00%

QC Holdings (NASDAQ: QCCO) shares currently have a dividend yield of 8.00%.

QC Holdings, Inc. and its subsidiaries provide various retail consumer financial products and services in the United States. The company offers payday loans, which provide cash to the customers in exchange for a promissory note with a maturity of two to three weeks. The company has a P/E ratio of 3.52.

The average volume for QC Holdings has been 11,900 shares per day over the past 30 days. QC Holdings has a market cap of $43.5 million and is part of the banking industry. Shares are down 22.8% year to date as of the close of trading on Thursday.

TheStreet Ratings rates QC Holdings 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 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 deteriorating net income.

Highlights from the ratings report include:
  • QCCO's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, QCCO has a quick ratio of 2.13, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has slightly increased to -$6.86 million or 3.89% when compared to the same quarter last year. In addition, QC HOLDINGS INC has also modestly surpassed the industry average cash flow growth rate of -3.55%.
  • QCCO, with its decline in revenue, slightly underperformed the industry average of 3.2%. Since the same quarter one year prior, revenues slightly dropped by 3.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • QC HOLDINGS 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 suffered a declining pattern earnings per share over the past two years. During the past fiscal year, QC HOLDINGS INC reported lower earnings of $0.43 versus $0.66 in the prior year.
  • 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 Consumer Finance industry. The net income has significantly decreased by 80.3% when compared to the same quarter one year ago, falling from $1.73 million to $0.34 million.

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Educational Development Corporation

Dividend Yield: 11.20%

Educational Development Corporation (NASDAQ: EDUC) shares currently have a dividend yield of 11.20%.

Educational Development Corporation operates as a trade publisher of the line of children's books in the United States. The company has a P/E ratio of 22.00.

The average volume for Educational Development Corporation has been 4,300 shares per day over the past 30 days. Educational Development Corporation has a market cap of $11.4 million and is part of the media industry. Shares are down 24.9% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Educational Development Corporation 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 and expanding profit margins. 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 deteriorating net income.

Highlights from the ratings report include:
  • EDUC's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.01, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for EDUCATIONAL DEVELOPMENT CORP is rather high; currently it is at 58.67%. Regardless of EDUC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.11% trails the industry average.
  • EDUC, with its decline in revenue, underperformed when compared the industry average of 9.2%. Since the same quarter one year prior, revenues slightly dropped by 9.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • EDUCATIONAL DEVELOPMENT 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, EDUCATIONAL DEVELOPMENT CORP reported lower earnings of $0.20 versus $0.36 in the prior year.
  • 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 Distributors industry. The net income has significantly decreased by 80.8% when compared to the same quarter one year ago, falling from $0.35 million to $0.07 million.

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

Medley Capital

Dividend Yield: 10.80%

Medley Capital (NYSE: MCC) shares currently have a dividend yield of 10.80%.

Medley Capital Corporation is a business development company. The fund seeks to invest in privately negotiated debt and equity securities of small and middle market companies. The company has a P/E ratio of 11.12.

The average volume for Medley Capital has been 550,100 shares per day over the past 30 days. Medley Capital has a market cap of $454.5 million and is part of the financial services industry. Shares are down 6% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Medley Capital as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • MCC's very impressive revenue growth greatly exceeded the industry average of 12.5%. Since the same quarter one year prior, revenues leaped by 92.5%. 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.
  • MEDLEY CAPITAL 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. 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, MEDLEY CAPITAL CORP increased its bottom line by earning $1.24 versus $0.55 in the prior year. This year, the market expects an improvement in earnings ($1.50 versus $1.24).
  • 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 Capital Markets industry. The net income has significantly decreased by 34.8% when compared to the same quarter one year ago, falling from $4.84 million to $3.16 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. When compared to other companies in the Capital Markets industry and the overall market, MEDLEY CAPITAL CORP's return on equity is below 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.

VOC Energy

Dividend Yield: 10.50%

VOC Energy (NYSE: VOC) shares currently have a dividend yield of 10.50%.

VOC Energy Trust acquires and holds a term net profits interest of the net proceeds from production of the interests in oil and natural gas properties in the states of Kansas and Texas. It owns an 80% term net profits interest of the net proceeds on the underlying properties.

The average volume for VOC Energy has been 82,800 shares per day over the past 30 days. VOC Energy has a market cap of $266.4 million and is part of the energy industry. Shares are up 22.1% year to date as of the close of trading on Thursday.

TheStreet Ratings rates VOC Energy 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • VOC 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.
  • The gross profit margin for VOC ENERGY TRUST is currently very high, coming in at 100.00%. VOC has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, VOC's net profit margin of 96.49% significantly outperformed against the industry.
  • VOC, with its decline in revenue, underperformed when compared the industry average of 6.5%. Since the same quarter one year prior, revenues fell by 28.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The share price of VOC ENERGY TRUST has not done very well: it is down 15.83% 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.
  • 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 other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, VOC ENERGY TRUST has underperformed in comparison with the industry average, but has greatly exceeded 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.

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