5 Hold-Rated Dividend Stocks: NTI, CWH, DRE, MEMP, NRF

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."

Northern Tier Energy

Dividend Yield: 4.90%

Northern Tier Energy (NYSE: NTI) shares currently have a dividend yield of 4.90%.

Northern Tier Energy LP operates as an independent downstream energy company with refining, retail, and pipeline operations in the United States. The company operates through two segments, Refining and Retail. The company has a P/E ratio of 7.81.

The average volume for Northern Tier Energy has been 1,014,500 shares per day over the past 30 days. Northern Tier Energy has a market cap of $2.3 billion and is part of the energy industry. Shares are down 2% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Northern Tier Energy as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins.

Highlights from the ratings report include:
  • Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, NORTHERN TIER ENERGY LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The revenue growth came in higher than the industry average of 5.4%. Since the same quarter one year prior, revenues rose by 13.8%. 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.
  • NTI's debt-to-equity ratio of 0.69 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. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.79 is weak.
  • The gross profit margin for NORTHERN TIER ENERGY LP is currently extremely low, coming in at 3.74%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 2.01% trails that of 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 55.5% when compared to the same quarter one year ago, falling from $61.10 million to $27.20 million.

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

CommonWealth REIT

Dividend Yield: 4.30%

CommonWealth REIT (NYSE: CWH) shares currently have a dividend yield of 4.30%.

CommonWealth REIT is a real estate investment trust launched and managed by Reit Management & Research LLC. The fund invests in the real estate markets of the United States. It seeks to invest in office buildings, industrial buildings, and leased industrial land. The company has a P/E ratio of 61.61.

The average volume for CommonWealth REIT has been 946,000 shares per day over the past 30 days. CommonWealth REIT has a market cap of $2.8 billion and is part of the real estate industry. Shares are up 45.5% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates CommonWealth REIT as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, solid stock price performance and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $52.96 million or 11.00% when compared to the same quarter last year. In addition, COMMONWEALTH REIT has also modestly surpassed the industry average cash flow growth rate of 8.47%.
  • Compared to its closing price of one year ago, CWH's share price has jumped by 44.25%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • CWH, with its decline in revenue, underperformed when compared the industry average of 9.6%. Since the same quarter one year prior, revenues slightly dropped by 7.7%. The declining revenue appears to have seeped down to the company's 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 1327.8% when compared to the same quarter one year ago, falling from $17.62 million to -$216.32 million.
  • The gross profit margin for COMMONWEALTH REIT is rather low; currently it is at 19.32%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -101.81% is significantly below 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.

Duke Realty

Dividend Yield: 4.60%

Duke Realty (NYSE: DRE) shares currently have a dividend yield of 4.60%.

Duke Realty Corporation operates as a real estate investment trust (REIT) in the United States. It offers leasing, property and asset management, development, construction, build-to-suit, and other tenant-related services.

The average volume for Duke Realty has been 2,521,000 shares per day over the past 30 days. Duke Realty has a market cap of $4.8 billion and is part of the real estate industry. Shares are up 5.8% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Duke Realty as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, 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 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 107.5% when compared to the same quarter one year prior, rising from -$17.15 million to $1.29 million.
  • Net operating cash flow has significantly increased by 95.41% to $119.38 million when compared to the same quarter last year. In addition, DUKE REALTY CORP has also vastly surpassed the industry average cash flow growth rate of 8.47%.
  • 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.
  • 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, DUKE REALTY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for DUKE REALTY CORP is currently extremely low, coming in at 14.47%. Regardless of DRE's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, DRE's net profit margin of 0.44% is significantly lower than 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.

Memorial Production Partners

Dividend Yield: 10.50%

Memorial Production Partners (NASDAQ: MEMP) shares currently have a dividend yield of 10.50%.

Memorial Production Partners LP, through its subsidiary, Memorial Production Operating LLC, engages in the acquisition, development, exploitation, and production of oil and natural gas properties. The company has a P/E ratio of 123.53.

The average volume for Memorial Production Partners has been 740,400 shares per day over the past 30 days. Memorial Production Partners has a market cap of $1.2 billion and is part of the energy industry. Shares are up 18.2% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Memorial Production Partners 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 also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 5.4%. Since the same quarter one year prior, revenues rose by 38.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 256.66% to $52.36 million when compared to the same quarter last year. In addition, MEMORIAL PRODUCTION PRTRS LP has also vastly surpassed the industry average cash flow growth rate of 1.10%.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • The debt-to-equity ratio of 1.15 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.47, which clearly demonstrates the inability to cover short-term cash needs.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MEMORIAL PRODUCTION PRTRS LP's return on equity is significantly below that of the industry average and is below 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.

Northstar Realty Finance Corporation

Dividend Yield: 6.60%

Northstar Realty Finance Corporation (NYSE: NRF) shares currently have a dividend yield of 6.60%.

NorthStar Realty Finance Corp., a real estate investment trust (REIT), operates as a commercial real estate (CRE) investment and asset management company in the United States.

The average volume for Northstar Realty Finance Corporation has been 5,043,300 shares per day over the past 30 days. Northstar Realty Finance Corporation has a market cap of $3.1 billion and is part of the real estate industry. Shares are up 83.5% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Northstar Realty Finance Corporation as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:
  • NRF's very impressive revenue growth greatly exceeded the industry average of 9.6%. Since the same quarter one year prior, revenues leaped by 50.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 38.73% and other important driving factors, this stock has surged by 83.88% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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 gross profit margin for NORTHSTAR REALTY FINANCE CP is rather high; currently it is at 61.93%. 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 -71.54% is in-line with 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 Real Estate Investment Trusts (REITs) industry average. The net income increased by 5.2% when compared to the same quarter one year prior, going from -$142.91 million to -$135.44 million.
  • 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, NORTHSTAR REALTY FINANCE CP's return on equity significantly trails 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.

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