What To Hold: Top 5 Hold-Rated Dividend Stocks: RSO, FGP, UMH, DX, CODI

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."

Resource Capital Corporation

Dividend Yield: 13.20%

Resource Capital Corporation (NYSE: RSO) shares currently have a dividend yield of 13.20%.

Resource Capital Corp., a specialty finance company, purchases and manages a diversified portfolio of commercial real estate-related assets and commercial finance assets in the United States. The company has a P/E ratio of 12.10.

The average volume for Resource Capital Corporation has been 1,024,400 shares per day over the past 30 days. Resource Capital Corporation has a market cap of $768.4 million and is part of the real estate industry. Shares are up 11.1% year to date as of the close of trading on Friday.

TheStreet Ratings rates Resource Capital Corporation as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, increase in stock price during the past year and expanding profit margins. 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:
  • Net operating cash flow has increased to $23.44 million or 33.15% when compared to the same quarter last year.
  • Compared to its price level of one year ago, RSO is up 1.85% to its most recent closing price of 6.05. Looking ahead, our view is that this company's fundamentals should 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 has significantly decreased by 49.3% when compared to the same quarter one year ago, falling from $16.45 million to $8.33 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.
  • RESOURCE 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, RESOURCE CAPITAL CORP increased its bottom line by earning $0.72 versus $0.56 in the prior year. For the next year, the market is expecting a contraction of 4.2% in earnings ($0.69 versus $0.72).

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

Ferrellgas Partners

Dividend Yield: 8.90%

Ferrellgas Partners (NYSE: FGP) shares currently have a dividend yield of 8.90%.

Ferrellgas Partners, L.P. engages in the distribution and sale of propane, and related equipment and supplies primarily in the United States. It transports propane to propane distribution locations, tanks on customers' premises, or to portable propane tanks delivered to retailers. The company has a P/E ratio of 36.84.

The average volume for Ferrellgas Partners has been 197,300 shares per day over the past 30 days. Ferrellgas Partners has a market cap of $1.8 billion and is part of the energy industry. Shares are up 33.4% year to date as of the close of trading on Friday.

TheStreet Ratings rates Ferrellgas Partners as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, increase in stock price during the past year and compelling growth in net income. 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:
  • Net operating cash flow has increased to $124.31 million or 17.36% when compared to the same quarter last year.
  • Compared to its price level of one year ago, FGP is up 15.23% to its most recent closing price of 22.47. Looking ahead, our view is that this company's fundamentals should 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.
  • FERRELLGAS PARTNERS -LP 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, FERRELLGAS PARTNERS -LP continued to lose money by earning -$0.14 versus -$0.58 in the prior year. This year, the market expects an improvement in earnings ($0.69 versus -$0.14).
  • Since the same quarter one year prior, revenues slightly dropped by 4.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for FERRELLGAS PARTNERS -LP is rather low; currently it is at 19.15%. Regardless of FGP's low profit margin, it has managed to increase from the same period last year.

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

UMH Properties

Dividend Yield: 7.50%

UMH Properties (NYSE: UMH) shares currently have a dividend yield of 7.50%.

UMH Properties, Inc. (UMH) is a real estate investment trust. The firm engages in the ownership and operation of manufactured home communities. It leases manufactured home spaces to private manufactured home owners, as well as leases homes to residents. The company has a P/E ratio of 20.02.

The average volume for UMH Properties has been 52,900 shares per day over the past 30 days. UMH Properties has a market cap of $181.4 million and is part of the real estate industry. Shares are down 7% year to date as of the close of trading on Friday.

TheStreet Ratings rates UMH Properties 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 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 and poor profit margins.

Highlights from the ratings report include:
  • Since the same quarter one year prior, revenues rose by 27.1%. 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 58.52% to $2.09 million when compared to the same quarter last year.
  • The net income has decreased by 19.8% when compared to the same quarter one year ago, dropping from $2.02 million to $1.62 million.
  • UMH PROPERTIES 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 two years. During the past fiscal year, UMH PROPERTIES INC reported lower earnings of $0.11 versus $0.14 in the prior year.
  • The gross profit margin for UMH PROPERTIES INC is rather low; currently it is at 20.49%. It has decreased from the same quarter the previous year.

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: 13.90%

Dynex Capital (NYSE: DX) shares currently have a dividend yield of 13.90%.

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 5.38.

The average volume for Dynex Capital has been 477,300 shares per day over the past 30 days. Dynex Capital has a market cap of $460.2 million and is part of the real estate industry. Shares are down 11.7% year to date as of the close of trading on Friday.

TheStreet Ratings rates Dynex Capital 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 compelling growth in net income. 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:
  • 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.
  • Net operating cash flow has significantly increased by 64.19% to $56.58 million when compared to the same quarter last year.
  • 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.
  • Compared to its price level of one year ago, DX is down 23.07% to its most recent closing price of 8.34. Looking ahead, our view is that this company's fundamentals will not have much impact either way, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • 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).

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

Compass Diversified Holdings Shares of Bene

Dividend Yield: 8.20%

Compass Diversified Holdings Shares of Bene (NYSE: CODI) shares currently have a dividend yield of 8.20%.

Compass Diversified Holdings is a public investment firm specializing in acquiring controlling stakes in small to middle market companies. The firm seeks to make middle market and buyout investments.

The average volume for Compass Diversified Holdings Shares of Bene has been 142,000 shares per day over the past 30 days. Compass Diversified Holdings Shares of Bene has a market cap of $853.0 million and is part of the diversified services industry. Shares are up 20.1% year to date as of the close of trading on Friday.

TheStreet Ratings rates Compass Diversified Holdings Shares of Bene as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and notable return on equity. 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:
  • Since the same quarter one year prior, revenues slightly increased by 6.8%. 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.
  • Net operating cash flow has significantly increased by 1477.57% to $2.27 million when compared to the same quarter last year.
  • COMPASS DIVERSIFIED HOLDINGS 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, COMPASS DIVERSIFIED HOLDINGS continued to lose money by earning -$0.05 versus -$0.81 in the prior year. This year, the market expects an improvement in earnings ($1.58 versus -$0.05).
  • The net income has significantly decreased by 848.7% when compared to the same quarter one year ago, falling from $0.08 million to -$0.57 million.
  • The gross profit margin for COMPASS DIVERSIFIED HOLDINGS is currently lower than what is desirable, coming in at 33.13%. It has decreased from the same quarter the previous 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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