Hold-Rated Dividend Stocks In The Top 5: SUNS, APSA, VNR, CCCL, GORO

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."

Solar Senior Capital

Dividend Yield: 7.80%

Solar Senior Capital (NASDAQ: SUNS) shares currently have a dividend yield of 7.80%.

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 26.17.

The average volume for Solar Senior Capital has been 29,100 shares per day over the past 30 days. Solar Senior Capital has a market cap of $208.2 million and is part of the financial services industry. Shares are down 3.2% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Solar Senior Capital 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 deteriorating net income, disappointing return on equity and relatively poor performance when compared with the S&P 500 during the past year.

Highlights from the ratings report include:
  • SUNS's revenue growth has slightly outpaced the industry average of 8.6%. 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.
  • The gross profit margin for SOLAR SENIOR CAPITAL LTD is currently very high, coming in at 73.06%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 52.98% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 263.69% to $13.70 million when compared to the same quarter last year. Despite an increase in cash flow, SOLAR SENIOR CAPITAL LTD's average is still marginally south of the industry average growth rate of 273.40%.
  • 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 Capital Markets industry. 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. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, SOLAR SENIOR CAPITAL LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.

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Alto Palermo

Dividend Yield: 8.30%

Alto Palermo (NASDAQ: APSA) shares currently have a dividend yield of 8.30%.

Alto Palermo S.A. engages in the ownership, acquisition, development, leasing, management, and operation of shopping centers, as well as residential and commercial complexes in Argentina. The company has a P/E ratio of 10.93.

The average volume for Alto Palermo has been 2,300 shares per day over the past 30 days. Alto Palermo has a market cap of $664.7 million and is part of the real estate industry. Shares are up 34.9% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Alto Palermo as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels and solid stock price performance. However, as a counter to these strengths, we find that net income has been generally deteriorating over time.

Highlights from the ratings report include:
  • Compared to other companies in the Real Estate Management & Development industry and the overall market, ALTO PALERMO SA's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for ALTO PALERMO SA is rather high; currently it is at 63.20%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, APSA's net profit margin of 18.92% compares favorably to the industry average.
  • Even though the current debt-to-equity ratio is 1.40, it is still below the industry average, suggesting that this level of debt is acceptable within the Real Estate Management & Development industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.96 is weak.
  • 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 Management & Development industry. The net income has significantly decreased by 81.5% when compared to the same quarter one year ago, falling from $72.68 million to $13.47 million.

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Vanguard Natural Resources

Dividend Yield: 8.80%

Vanguard Natural Resources (NASDAQ: VNR) shares currently have a dividend yield of 8.80%.

Vanguard Natural Resources, LLC, through its subsidiaries, engages in the acquisition and development of oil and natural gas properties in the United States.

The average volume for Vanguard Natural Resources has been 320,700 shares per day over the past 30 days. Vanguard Natural Resources has a market cap of $2.2 billion and is part of the energy industry. Shares are up 8.8% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Vanguard Natural Resources as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:
  • VNR's very impressive revenue growth greatly exceeded the industry average of 5.4%. Since the same quarter one year prior, revenues leaped by 272.6%. 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 104.5% when compared to the same quarter one year prior, rising from -$68.73 million to $3.12 million.
  • VANGUARD NATURAL RESOURCES 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, VANGUARD NATURAL RESOURCES swung to a loss, reporting -$2.76 versus $2.12 in the prior year. This year, the market expects an improvement in earnings ($1.15 versus -$2.76).
  • VNR's debt-to-equity ratio of 0.74 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that VNR's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.65 is low and demonstrates weak liquidity.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, VANGUARD NATURAL RESOURCES's return on equity significantly trails that of both the industry average and the S&P 500.

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China Ceramics

Dividend Yield: 8.00%

China Ceramics (NASDAQ: CCCL) shares currently have a dividend yield of 8.00%.

China Ceramics Co., Ltd. engages in the manufacture and sale of ceramic tiles for exterior siding and interior flooring, and design in residential and commercial buildings in the People's Republic of China and internationally. The company has a P/E ratio of 13.21.

The average volume for China Ceramics has been 61,100 shares per day over the past 30 days. China Ceramics has a market cap of $51.3 million and is part of the materials & construction industry. Shares are up 14.4% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates China Ceramics 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, attractive valuation levels and increase in stock price during the past year. 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:
  • CCCL's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CCCL has a quick ratio of 2.00, which demonstrates the ability of the company to cover short-term liquidity needs.
  • CCCL's share price has surged by 27.72% 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.
  • 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 Building Products industry. The net income has significantly decreased by 94.0% when compared to the same quarter one year ago, falling from $11.85 million to $0.71 million.
  • 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 Building Products industry and the overall market on the basis of return on equity, CHINA CERAMICS CO LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.

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

Gold Resource

Dividend Yield: 7.30%

Gold Resource (AMEX: GORO) shares currently have a dividend yield of 7.30%.

Gold Resource Corporation engages in the exploration for and production of gold and silver in Mexico. The company also explores for copper, lead, and zinc. The company has a P/E ratio of 19.60.

The average volume for Gold Resource has been 671,300 shares per day over the past 30 days. Gold Resource has a market cap of $263.5 million and is part of the metals & mining industry. Shares are down 68.2% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Gold Resource 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 notable return on equity. 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:
  • GORO's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GORO has a quick ratio of 2.13, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 41.22% is the gross profit margin for GOLD RESOURCE CORP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, GORO's net profit margin of -6.22% significantly underperformed when compared to the industry average.
  • 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 Metals & Mining industry. The net income has significantly decreased by 126.6% when compared to the same quarter one year ago, falling from $6.87 million to -$1.83 million.
  • Net operating cash flow has significantly decreased to -$7.32 million or 378.06% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much 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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