5 Hold-Rated Dividend Stocks Taking The Lead: STON, MCEP, EFC, VGR, 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."

Stonemor Partners

Dividend Yield: 9.50%

Stonemor Partners (NYSE: STON) shares currently have a dividend yield of 9.50%.

StoneMor Partners L.P., together with its subsidiaries, engages in the ownership and operation of cemeteries in the United States. It operates through Cemetery Operations Southeast, Cemetery Operations Northeast, Cemetery Operations West, and Funeral Homes segments.

The average volume for Stonemor Partners has been 65,700 shares per day over the past 30 days. Stonemor Partners has a market cap of $539.7 million and is part of the diversified services industry. Shares are up 21.8% year to date as of the close of trading on Friday.

TheStreet Ratings rates Stonemor Partners as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, 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 increased to $20.41 million or 22.95% when compared to the same quarter last year. In addition, STONEMOR PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -63.74%.
  • 49.84% is the gross profit margin for STONEMOR PARTNERS LP which we consider to be strong. Regardless of STON's high profit margin, it has managed to decrease from the same period last year.
  • 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 Diversified Consumer Services industry and the overall market, STONEMOR PARTNERS LP'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 when compared to that of the S&P 500 and the Diversified Consumer Services industry. The net income has significantly decreased by 239.9% when compared to the same quarter one year ago, falling from $1.06 million to -$1.48 million.

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

Mid-Con Energy Partners

Dividend Yield: 9.10%

Mid-Con Energy Partners (NASDAQ: MCEP) shares currently have a dividend yield of 9.10%.

Mid-Con Energy Partners, LP engages in the acquisition, exploitation, development, and production of oil and natural gas properties in North America. The company has a P/E ratio of 17.10.

The average volume for Mid-Con Energy Partners has been 63,100 shares per day over the past 30 days. Mid-Con Energy Partners has a market cap of $435.5 million and is part of the energy industry. Shares are up 20.7% year to date as of the close of trading on Friday.

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

Highlights from the ratings report include:
  • MCEP's very impressive revenue growth greatly exceeded the industry average of 5.5%. Since the same quarter one year prior, revenues leaped by 59.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MID-CON ENERGY 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, MID-CON ENERGY PARTNERS -LP increased its bottom line by earning $1.63 versus $0.51 in the prior year. This year, the market expects an improvement in earnings ($1.66 versus $1.63).
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, our view is that this company's fundamentals will 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.
  • Currently the debt-to-equity ratio of 1.68 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, MCEP's quick ratio is somewhat strong at 1.32, demonstrating the ability to handle short-term liquidity needs.
  • Net operating cash flow has declined marginally to $12.90 million or 3.72% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, MID-CON ENERGY PARTNERS -LP has marginally lower results.

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

Ellington Financial

Dividend Yield: 13.30%

Ellington Financial (NYSE: EFC) shares currently have a dividend yield of 13.30%.

Ellington Financial LLC, a specialty finance company, acquires and manages mortgage-related assets, including residential mortgage backed securities backed by prime jumbo, Alt-A, manufactured housing and subprime residential mortgage loans, and residential mortgage-backed securities. The company has a P/E ratio of 5.96.

The average volume for Ellington Financial has been 106,100 shares per day over the past 30 days. Ellington Financial has a market cap of $589.4 million and is part of the real estate industry. Shares are up 3.2% year to date as of the close of trading on Friday.

TheStreet Ratings rates Ellington Financial as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • EFC's very impressive revenue growth greatly exceeded the industry average of 8.6%. Since the same quarter one year prior, revenues leaped by 56.0%. 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 gross profit margin for ELLINGTON FINANCIAL LLC is currently very high, coming in at 73.47%. It has increased significantly from the same period last year. Along with this, the net profit margin of 48.72% significantly outperformed against the industry average.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • ELLINGTON FINANCIAL LLC has experienced 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, ELLINGTON FINANCIAL LLC increased its bottom line by earning $5.32 versus $0.61 in the prior year. For the next year, the market is expecting a contraction of 31.5% in earnings ($3.65 versus $5.32).
  • 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 60.3% when compared to the same quarter one year ago, falling from $29.54 million to $11.73 million.

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

Vector Group

Dividend Yield: 9.70%

Vector Group (NYSE: VGR) shares currently have a dividend yield of 9.70%.

Vector Group Ltd., through its subsidiaries, engages in the manufacture and sale of cigarettes in the United States. The company operates in Tobacco and Real Estate segments.

The average volume for Vector Group has been 372,700 shares per day over the past 30 days. Vector Group has a market cap of $1.6 billion and is part of the tobacco industry. Shares are up 10.8% year to date as of the close of trading on Friday.

TheStreet Ratings rates Vector Group as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and good cash flow from operations. 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:
  • VGR's revenue growth has slightly outpaced the industry average of 1.4%. Since the same quarter one year prior, revenues slightly increased by 2.3%. 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.
  • The gross profit margin for VECTOR GROUP LTD is rather high; currently it is at 52.96%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -24.63% is in-line with the industry average.
  • Net operating cash flow has increased to $50.05 million or 26.98% when compared to the same quarter last year. Despite an increase in cash flow, VECTOR GROUP LTD's average is still marginally south of the industry average growth rate of 28.94%.
  • VECTOR GROUP LTD has experienced 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, VECTOR GROUP LTD reported lower earnings of $0.29 versus $0.78 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 Tobacco industry. The net income has significantly decreased by 305.7% when compared to the same quarter one year ago, falling from $17.93 million to -$36.89 million.

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: 12.60%

VOC Energy (NYSE: VOC) shares currently have a dividend yield of 12.60%.

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 77,700 shares per day over the past 30 days. VOC Energy has a market cap of $285.6 million and is part of the energy industry. Shares are up 30.9% year to date as of the close of trading on Friday.

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, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including 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's share price has surged by 30.63% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • 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.
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 30.4% when compared to the same quarter one year ago, falling from $11.73 million to $8.16 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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