4 Hold-Rated Dividend Stocks: KFN, SUNS, IRS, EVEP

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."

KKR Financial Holdings

Dividend Yield: 9.10%

KKR Financial Holdings (NYSE: KFN) shares currently have a dividend yield of 9.10%.

KKR Financial Holdings LLC, together with its subsidiaries, operates as a specialty finance company with expertise in a range of asset classes. The company has a P/E ratio of 6.91.

The average volume for KKR Financial Holdings has been 919,700 shares per day over the past 30 days. KKR Financial Holdings has a market cap of $2.0 billion and is part of the real estate industry. Shares are down 8.7% year to date as of the close of trading on Friday.

TheStreet Ratings rates KKR Financial Holdings as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Compared to its price level of one year ago, KFN is down 4.73% to its most recent closing price of 9.68. 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.
  • The net income has significantly decreased by 64.4% when compared to the same quarter one year ago, falling from $111.96 million to $39.89 million.
  • KKR FINANCIAL HOLDINGS 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, KKR FINANCIAL HOLDINGS LLC increased its bottom line by earning $1.88 versus $1.75 in the prior year. For the next year, the market is expecting a contraction of 33.5% in earnings ($1.25 versus $1.88).
  • Although KFN's debt-to-equity ratio of 2.32 is very high, it is currently less than that of 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.

Solar Senior Capital

Dividend Yield: 7.70%

Solar Senior Capital (NASDAQ: SUNS) shares currently have a dividend yield of 7.70%.

Solar Senior Capital Ltd. is a business development company specializing in investments in leveraged, middle-market companies in the United States. The fund invests in the form of senior secured loans, including first lien, unitranche, and second lien debt instruments. The company has a P/E ratio of 26.64.

The average volume for Solar Senior Capital has been 27,700 shares per day over the past 30 days. Solar Senior Capital has a market cap of $211.8 million and is part of the financial services industry. Shares are down 1.5% year to date as of the close of trading on Friday.

TheStreet Ratings rates Solar Senior Capital as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and increase in stock price during the past year. 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 slightly increased by 0.5%. 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.
  • Net operating cash flow has significantly increased by 263.69% to $13.70 million when compared to the same quarter last year.
  • The net income has significantly decreased by 31.6% when compared to the same quarter one year ago, falling from $3.81 million to $2.60 million.
  • 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.
  • SOLAR SENIOR CAPITAL LTD's earnings per share declined by 42.5% in the most recent quarter compared to 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, SOLAR SENIOR CAPITAL LTD turned its bottom line around by earning $1.46 versus -$0.03 in the prior year. For the next year, the market is expecting a contraction of 19.2% in earnings ($1.18 versus $1.46).

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

IRSA Inversiones y Representaciones

Dividend Yield: 10.10%

IRSA Inversiones y Representaciones (NYSE: IRS) shares currently have a dividend yield of 10.10%.

IRSA Investments and Representations Inc., through its subsidiaries, is engaged in a range of diversified real estate related activities in Argentina. The company has a P/E ratio of 24.72.

The average volume for IRSA Inversiones y Representaciones has been 64,300 shares per day over the past 30 days. IRSA Inversiones y Representaciones has a market cap of $672.4 million and is part of the real estate industry. Shares are up 66.7% year to date as of the close of trading on Friday.

TheStreet Ratings rates IRSA Inversiones y Representaciones as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and notable return on equity. 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 slightly increased by 4.1%. 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.
  • Compared to its price level of one year ago, IRS is up 54.31% to its most recent closing price of 11.62. 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 company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization.
  • The net income has significantly decreased by 35.9% when compared to the same quarter one year ago, falling from $8.78 million to $5.63 million.
  • IRSA INVERSIONES Y REPSTN SA's earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, IRSA INVERSIONES Y REPSTN SA reported lower earnings of $0.76 versus $1.07 in the prior year. For the next year, the market is expecting a contraction of 59.2% in earnings ($0.31 versus $0.76).

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

EV Energy Partner

Dividend Yield: 9.10%

EV Energy Partner (NASDAQ: EVEP) shares currently have a dividend yield of 9.10%.

EV Energy Partners, L.P. engages in the acquisition, development, and production of oil and natural gas properties in the United States.

The average volume for EV Energy Partner has been 281,400 shares per day over the past 30 days. EV Energy Partner has a market cap of $1.6 billion and is part of the energy industry. Shares are down 40% year to date as of the close of trading on Friday.

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

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.4%. Since the same quarter one year prior, revenues rose by 18.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 75.4% when compared to the same quarter one year prior, rising from -$50.02 million to -$12.31 million.
  • EV ENERGY PARTNERS 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, EV ENERGY PARTNERS LP swung to a loss, reporting -$0.35 versus $2.56 in the prior year. This year, the market expects an improvement in earnings ($0.02 versus -$0.35).
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, EV ENERGY PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $48.83 million or 21.23% 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.

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