Best 5 Yielding Hold-Rated Stocks: ARR, AGNC, PDM, NS, TWO

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."

ARMOUR Residential REIT

Dividend Yield: 15.00%

ARMOUR Residential REIT (NYSE: ARR) shares currently have a dividend yield of 15.00%.

ARMOUR Residential REIT, Inc. is a real estate investment trust launched and managed by ARMOUR Residential Management LLC. It invests in the real estate markets of the United States. The company has a P/E ratio of 2.33.

The average volume for ARMOUR Residential REIT has been 4,946,200 shares per day over the past 30 days. ARMOUR Residential REIT has a market cap of $1.5 billion and is part of the real estate industry. Shares are down 38.3% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates ARMOUR Residential REIT as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • 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. In comparison to the other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ARMOUR RESIDENTIAL REIT INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • ARR, with its very weak revenue results, has greatly underperformed against the industry average of 9.4%. Since the same quarter one year prior, revenues plummeted by 216.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 518.5% when compared to the same quarter one year ago, falling from $54.94 million to -$229.94 million.
  • Net operating cash flow has decreased to $86.27 million or 18.52% 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.

American Capital Agency

Dividend Yield: 15.30%

American Capital Agency (NASDAQ: AGNC) shares currently have a dividend yield of 15.30%.

American Capital Agency Corp. operates as a real estate investment trust (REIT). The company has a P/E ratio of 3.41.

The average volume for American Capital Agency has been 6,881,700 shares per day over the past 30 days. American Capital Agency has a market cap of $8.0 billion and is part of the real estate industry. Shares are down 27.6% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates American Capital Agency as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, reasonable valuation levels 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, unimpressive growth in net income and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • 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. In comparison to the other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, AMERICAN CAPITAL AGENCY CORP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • AGNC, with its very weak revenue results, has greatly underperformed against the industry average of 9.4%. Since the same quarter one year prior, revenues plummeted by 124.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • AMERICAN CAPITAL AGENCY CORP 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, AMERICAN CAPITAL AGENCY CORP reported lower earnings of $4.40 versus $5.22 in the prior year. For the next year, the market is expecting a contraction of 5.7% in earnings ($4.15 versus $4.40).
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 915.1% when compared to the same quarter one year ago, falling from $86.00 million to -$701.00 million.

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

Piedmont Office Realty

Dividend Yield: 4.70%

Piedmont Office Realty (NYSE: PDM) shares currently have a dividend yield of 4.70%.

Piedmont Office Realty Trust, Inc. engages in the acquisition and ownership of commercial real estate properties in the United States. Its property portfolio primarily consists of office and industrial buildings, warehouses, and manufacturing facilities. The company has a P/E ratio of 37.69.

The average volume for Piedmont Office Realty has been 1,100,000 shares per day over the past 30 days. Piedmont Office Realty has a market cap of $2.7 billion and is part of the real estate industry. Shares are down 6% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Piedmont Office Realty as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and reasonable valuation levels. 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:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 76.3% when compared to the same quarter one year prior, rising from $10.83 million to $19.10 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 8.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PIEDMONT OFFICE REALTY TRUST 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, PIEDMONT OFFICE REALTY TRUST reported lower earnings of $0.38 versus $0.49 in the prior year. This year, the market expects an improvement in earnings ($0.43 versus $0.38).
  • 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, PIEDMONT OFFICE REALTY TRUST underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for PIEDMONT OFFICE REALTY TRUST is rather low; currently it is at 24.41%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 13.21% 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.

NuStar Energy L.P

Dividend Yield: 9.00%

NuStar Energy L.P (NYSE: NS) shares currently have a dividend yield of 9.00%.

NuStar Energy L.P. engages in the terminalling, storage, and transportation of petroleum products primarily in the United States and the Netherlands. The company operates in three segments: Storage, Transportation, and Asphalt and Fuels Marketing. The company has a P/E ratio of 66.45.

The average volume for NuStar Energy L.P has been 597,200 shares per day over the past 30 days. NuStar Energy L.P has a market cap of $3.8 billion and is part of the energy industry. Shares are up 16.5% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates NuStar Energy L.P as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, impressive record of earnings per share growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 657.3% when compared to the same quarter one year prior, rising from $4.39 million to $33.24 million.
  • NUSTAR ENERGY LP 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, NUSTAR ENERGY LP swung to a loss, reporting -$2.95 versus $2.79 in the prior year. This year, the market expects an improvement in earnings ($1.05 versus -$2.95).
  • NS, with its very weak revenue results, has greatly underperformed against the industry average of 5.5%. Since the same quarter one year prior, revenues plummeted by 51.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for NUSTAR ENERGY LP is rather low; currently it is at 16.96%. Regardless of NS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.26% trails the industry average.
  • The debt-to-equity ratio of 1.04 is relatively high when compared with the industry average, suggesting a need for better debt level management.

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

Two Harbors Investment

Dividend Yield: 12.20%

Two Harbors Investment (NYSE: TWO) shares currently have a dividend yield of 12.20%.

Two Harbors Investment Corp. operates as a real estate investment trust (REIT) that focuses on investing in, financing, and managing residential mortgage-backed securities (RMBS), residential mortgage loans, and other financial assets. The company has a P/E ratio of 5.45.

The average volume for Two Harbors Investment has been 4,592,400 shares per day over the past 30 days. Two Harbors Investment has a market cap of $3.3 billion and is part of the real estate industry. Shares are down 17.1% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Two Harbors Investment as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, 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, unimpressive growth in net income and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The gross profit margin for TWO HARBORS INVESTMENT CORP is currently very high, coming in at 133.74%. It has increased significantly from the same period last year. Along with this, the net profit margin of 294.88% significantly outperformed against the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, TWO HARBORS INVESTMENT CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • TWO HARBORS INVESTMENT CORP 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, TWO HARBORS INVESTMENT CORP reported lower earnings of $1.11 versus $1.27 in the prior year. For the next year, the market is expecting a contraction of 18.9% in earnings ($0.90 versus $1.11).
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 819.1% when compared to the same quarter one year ago, falling from $26.80 million to -$192.73 million.

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

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