5 Hold-Rated Dividend Stocks: EDR, PM, ARCP, BMO, PCG

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."

Education Realty

Dividend Yield: 5.00%

Education Realty (NYSE: EDR) shares currently have a dividend yield of 5.00%.

Education Realty Trust, Inc., a real estate investment trust (REIT), develops, acquires, owns, and manages student housing communities located near university campuses in the United States. The company has a P/E ratio of 218.00.

The average volume for Education Realty has been 1,262,400 shares per day over the past 30 days. Education Realty has a market cap of $1.0 billion and is part of the real estate industry. Shares are down 18.1% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Education Realty as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and poor profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.6%. Since the same quarter one year prior, revenues rose by 34.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • EDUCATION REALTY TRUST INC has improved earnings per share by 20.0% 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, EDUCATION REALTY TRUST INC turned its bottom line around by earning $0.00 versus -$0.08 in the prior year. This year, the market expects an increase in earnings to $0.09 from $0.00.
  • 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 1012.5% when compared to the same quarter one year ago, falling from $0.49 million to -$4.46 million.
  • EDR has underperformed the S&P 500 Index, declining 16.38% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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

Philip Morris International

Dividend Yield: 4.40%

Philip Morris International (NYSE: PM) shares currently have a dividend yield of 4.40%.

Philip Morris International Inc., through its subsidiaries, manufactures and sells cigarettes and other tobacco products. The company has a P/E ratio of 16.17.

The average volume for Philip Morris International has been 5,235,000 shares per day over the past 30 days. Philip Morris International has a market cap of $136.6 billion and is part of the tobacco industry. Shares are up 1.9% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Philip Morris International as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • PM's revenue growth has slightly outpaced the industry average of 1.4%. Since the same quarter one year prior, revenues slightly increased by 0.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PHILIP MORRIS INTERNATIONAL has improved earnings per share by 9.1% 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, PHILIP MORRIS INTERNATIONAL increased its bottom line by earning $5.18 versus $4.84 in the prior year. This year, the market expects an improvement in earnings ($5.41 versus $5.18).
  • The gross profit margin for PHILIP MORRIS INTERNATIONAL is rather high; currently it is at 69.43%. Regardless of PM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PM's net profit margin of 29.51% compares favorably to the industry average.
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Tobacco industry average. The net income increased by 5.1% when compared to the same quarter one year prior, going from $2,227.00 million to $2,340.00 million.
  • In its most recent trading session, PM 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. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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

American Realty Capital Properties Inc Clas

Dividend Yield: 7.40%

American Realty Capital Properties Inc Clas (NASDAQ: ARCP) shares currently have a dividend yield of 7.40%.

American Realty Capital Properties, Inc. owns and acquires single tenant, freestanding commercial real estate that is net leased on a medium-term basis, primarily to investment grade credit rated and other creditworthy tenants. The company principally invests in retail and office properties.

The average volume for American Realty Capital Properties Inc Clas has been 5,482,500 shares per day over the past 30 days. American Realty Capital Properties Inc Clas has a market cap of $2.4 billion and is part of the real estate industry. Shares are down 4.1% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates American Realty Capital Properties Inc Clas as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • ARCP's very impressive revenue growth greatly exceeded the industry average of 9.6%. Since the same quarter one year prior, revenues leaped by 223.6%. 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 622.25% to $16.29 million when compared to the same quarter last year. In addition, AMERICAN RLTY CAP PPTY INC has also vastly surpassed the industry average cash flow growth rate of 8.47%.
  • The gross profit margin for AMERICAN RLTY CAP PPTY INC is currently extremely low, coming in at 5.92%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, ARCP's net profit margin of -97.00% 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 365.4% when compared to the same quarter one year ago, falling from -$12.69 million to -$59.06 million.

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

Bank of Montreal

Dividend Yield: 4.40%

Bank of Montreal (NYSE: BMO) shares currently have a dividend yield of 4.40%.

Bank of Montreal provides various retail banking, wealth management, and investment banking products and services in Canada, the United States, and internationally. The company has a P/E ratio of 10.79.

The average volume for Bank of Montreal has been 338,300 shares per day over the past 30 days. Bank of Montreal has a market cap of $41.7 billion and is part of the banking industry. Shares are up 5.6% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Bank of Montreal as a hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • BANK OF MONTREAL's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, BANK OF MONTREAL increased its bottom line by earning $6.25 versus $6.15 in the prior year.
  • The gross profit margin for BANK OF MONTREAL is currently very high, coming in at 83.68%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, BMO's net profit margin of 20.02% significantly trails the industry average.
  • Net operating cash flow has significantly increased by 65.96% to -$4,785.00 million when compared to the same quarter last year. Despite an increase in cash flow of 65.96%, BANK OF MONTREAL is still growing at a significantly lower rate than the industry average of 122.81%.
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Commercial Banks industry average. The net income increased by 1.0% when compared to the same quarter one year prior, going from $1,064.00 million to $1,075.00 million.
  • 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 Commercial Banks industry and the overall market on the basis of return on equity, BANK OF MONTREAL has outperformed in comparison with the industry average, but has underperformed when compared to 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.

PG&E

Dividend Yield: 4.50%

PG&E (NYSE: PCG) shares currently have a dividend yield of 4.50%.

PG&E Corporation, through its subsidiary, Pacific Gas and Electric Company (Utility), transmits, delivers, and sells electricity and natural gas to customers primarily in northern and central California. The Utility provides services to approximately 15 million people. The company has a P/E ratio of 25.11.

The average volume for PG&E has been 2,994,000 shares per day over the past 30 days. PG&E has a market cap of $18.2 billion and is part of the utilities industry. Shares are up 0.6% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates PG&E as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels 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 poor profit margins.

Highlights from the ratings report include:
  • PCG's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 5.0%. 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.
  • Net operating cash flow has slightly increased to $1,374.00 million or 7.51% when compared to the same quarter last year. Despite an increase in cash flow, PG&E CORP's cash flow growth rate is still lower than the industry average growth rate of 26.22%.
  • 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 Multi-Utilities industry. The net income has significantly decreased by 54.9% when compared to the same quarter one year ago, falling from $364.00 million to $164.00 million.
  • 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. When compared to other companies in the Multi-Utilities industry and the overall market, PG&E CORP's return on equity is below that of both the industry average and 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.

Other helpful dividend tools from TheStreet:
null

If you liked this article you might like

5 REITs You Should Buy Right Now

5 REITs You Should Buy Right Now

Here Are 5 REITs You Should Buy Right Now

Here Are 5 REITs You Should Buy Right Now

Don't Miss Today's Strong And Under The Radar Stock: Education Realty (EDR)

Don't Miss Today's Strong And Under The Radar Stock: Education Realty (EDR)

Education Realty Trust (EDR) Stock Closed Higher, Canaccord Boosts Price Target

Education Realty Trust (EDR) Stock Closed Higher, Canaccord Boosts Price Target

Strong And Under The Radar: Education Realty (EDR)

Strong And Under The Radar: Education Realty (EDR)