What To Hold: Top 4 Hold-Rated Dividend Stocks: EDUC, NKA, PVR, GOOD

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 4 stocks with substantial yields, that ultimately, we have rated "Hold."

Educational Development Corporation

Dividend Yield: 12.80%

Educational Development Corporation (NASDAQ: EDUC) shares currently have a dividend yield of 12.80%.

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 19.23.

The average volume for Educational Development Corporation has been 5,000 shares per day over the past 30 days. Educational Development Corporation has a market cap of $10.0 million and is part of the media industry. Shares are down 34.4% year to date as of the close of trading on Friday.

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, reasonable valuation levels 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.
  • 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.

Niska Gas Storage Partners

Dividend Yield: 9.40%

Niska Gas Storage Partners (NYSE: NKA) shares currently have a dividend yield of 9.40%.

Niska Gas Storage Partners LLC owns and operates natural gas storage assets in North America. The company has a P/E ratio of 106.71.

The average volume for Niska Gas Storage Partners has been 62,200 shares per day over the past 30 days. Niska Gas Storage Partners has a market cap of $515.3 million and is part of the utilities industry. Shares are up 33.6% year to date as of the close of trading on Friday.

TheStreet Ratings rates Niska Gas Storage Partners as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • NKA's very impressive revenue growth greatly exceeded the industry average of 6.4%. Since the same quarter one year prior, revenues leaped by 193.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NISKA GAS STORAGE PARTNERS 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, NISKA GAS STORAGE PARTNERS continued to lose money by earning -$0.63 versus -$2.38 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus -$0.63).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, NISKA GAS STORAGE PARTNERS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio of 1.13 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, NKA has a quick ratio of 0.52, 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.

PVR Partners

Dividend Yield: 9.40%

PVR Partners (NYSE: PVR) shares currently have a dividend yield of 9.40%.

PVR Partners, L.P. engages in the gathering and processing of natural gas; and management of coal and natural resource properties in the United States. The company operates in three segments: Eastern Midstream, Midcontinent Midstream, and Coal and Natural Resource Management.

The average volume for PVR Partners has been 441,800 shares per day over the past 30 days. PVR Partners has a market cap of $2.2 billion and is part of the energy industry. Shares are down 9.8% year to date as of the close of trading on Friday.

TheStreet Ratings rates PVR Partners 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 also find weaknesses including generally higher debt management risk, a generally disappointing performance in the stock itself and unimpressive growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.4%. Since the same quarter one year prior, revenues rose by 22.7%. 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 slightly increased to $25.61 million or 9.08% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -15.63%.
  • 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 29.5% when compared to the same quarter one year ago, falling from $7.81 million to $5.51 million.
  • The debt-to-equity ratio of 1.49 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, PVR maintains a poor quick ratio of 0.98, which illustrates the inability to avoid short-term cash problems.

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

Gladstone Commercial Corporation

Dividend Yield: 8.30%

Gladstone Commercial Corporation (NASDAQ: GOOD) shares currently have a dividend yield of 8.30%.

Gladstone Commercial Corporation operates as a real estate investment trust (REIT) in the United States. It engages in investing in and owning net leased industrial and commercial real properties, and making long-term industrial and commercial mortgage loans.

The average volume for Gladstone Commercial Corporation has been 59,000 shares per day over the past 30 days. Gladstone Commercial Corporation has a market cap of $255.4 million and is part of the real estate industry. Shares are up 0.4% year to date as of the close of trading on Friday.

TheStreet Ratings rates Gladstone Commercial Corporation as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth 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 disappointing return on equity.

Highlights from the ratings report include:
  • GOOD's revenue growth has slightly outpaced the industry average of 10.8%. Since the same quarter one year prior, revenues rose by 14.9%. 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.
  • 48.32% is the gross profit margin for GLADSTONE COMMERCIAL CORP which we consider to be strong. Regardless of GOOD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GOOD's net profit margin of 3.15% is significantly lower than the industry average.
  • In its most recent trading session, GOOD has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • 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, GLADSTONE COMMERCIAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $4.49 million or 12.74% 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.

Other helpful dividend tools from TheStreet:

null

More from Markets

Dow Slips 178 Points; S&P 500 and Nasdaq Also Decline

Dow Slips 178 Points; S&P 500 and Nasdaq Also Decline

Legal Weed Sales in California Are Off to a Less Than Smokin' Start

Legal Weed Sales in California Are Off to a Less Than Smokin' Start

Owner of Moviepass Sees Stock Plummet

Owner of Moviepass Sees Stock Plummet

Ford, GM Gain as China Slashes Auto Import Tariffs

Ford, GM Gain as China Slashes Auto Import Tariffs

U.S. Crude Oil Hits Fresh 3-Year Highs as Gasoline Heads to $3 a Gallon

U.S. Crude Oil Hits Fresh 3-Year Highs as Gasoline Heads to $3 a Gallon