4 Hold-Rated Dividend Stocks: CMO, WIN, WPC, WRI

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."

Capstead Mortgage Corporation

Dividend Yield: 10.10%

Capstead Mortgage Corporation (NYSE: CMO) shares currently have a dividend yield of 10.10%.

Capstead Mortgage Corporation operates as a real estate investment trust in the United States. The company has a P/E ratio of 13.94.

The average volume for Capstead Mortgage Corporation has been 1,037,200 shares per day over the past 30 days. Capstead Mortgage Corporation has a market cap of $1.2 billion and is part of the real estate industry. Shares are up 2.1% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Capstead Mortgage Corporation as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins 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:
  • The gross profit margin for CAPSTEAD MORTGAGE CORP is currently very high, coming in at 91.38%. Regardless of CMO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CMO's net profit margin of 52.93% significantly outperformed against the industry.
  • The revenue fell significantly faster than the industry average of 9.6%. Since the same quarter one year prior, revenues fell by 26.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, CAPSTEAD MORTGAGE CORP's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $67.42 million or 19.23% 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.

Windstream Holdings

Dividend Yield: 12.60%

Windstream Holdings (NASDAQ: WIN) shares currently have a dividend yield of 12.60%.

Windstream Holdings, Inc. provides communications and technology solutions in the United States. The company offers managed services and cloud computing services to businesses, as well as broadband, voice, and video services to consumers primarily in rural markets. The company has a P/E ratio of 37.90.

The average volume for Windstream Holdings has been 6,264,700 shares per day over the past 30 days. Windstream Holdings has a market cap of $4.7 billion and is part of the telecommunications industry. Shares are up 0.4% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Windstream Holdings as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and expanding profit margins. 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 generally higher debt management risk.

Highlights from the ratings report include:
  • 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 Diversified Telecommunication Services industry and the overall market, WINDSTREAM HOLDINGS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $448.10 million or 10.15% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.59%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.6%. Since the same quarter one year prior, revenues slightly dropped by 2.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The debt-to-equity ratio is very high at 10.35 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, WIN has a quick ratio of 0.50, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • The share price of WINDSTREAM HOLDINGS INC has not done very well: it is down 8.98% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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

W. P. Carey

Dividend Yield: 5.70%

W. P. Carey (NYSE: WPC) shares currently have a dividend yield of 5.70%.

W. P. Carey Inc. is an independent equity real estate investment trust. The firm also provides long-term sale-leaseback and build-to-suit financing for companies. It invests in the real estate markets across the globe. The company has a P/E ratio of 67.69.

The average volume for W. P. Carey has been 288,900 shares per day over the past 30 days. W. P. Carey has a market cap of $4.2 billion and is part of the real estate industry. Shares are down 0.3% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates W. P. Carey as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and good cash flow from operations. 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:
  • WPC's very impressive revenue growth greatly exceeded the industry average of 9.6%. Since the same quarter one year prior, revenues leaped by 99.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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 Real Estate Investment Trusts (REITs) industry. The net income increased by 615.1% when compared to the same quarter one year prior, rising from $2.59 million to $18.51 million.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, W P CAREY INC's return on equity is below that of both the industry average and the S&P 500.
  • W P CAREY INC has improved earnings per share by 23.8% 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, W P CAREY INC reported lower earnings of $1.96 versus $3.71 in the prior year. For the next year, the market is expecting a contraction of 5.9% in earnings ($1.85 versus $1.96).

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

Weingarten Realty Investors

Dividend Yield: 4.40%

Weingarten Realty Investors (NYSE: WRI) shares currently have a dividend yield of 4.40%.

Weingarten Realty Investors is a publically owned equity real estate investment trust. The firm invests in the real estate markets of United States. The firm engages in ownership, management, acquisition, development and redevelopment. The company has a P/E ratio of 41.61.

The average volume for Weingarten Realty Investors has been 716,400 shares per day over the past 30 days. Weingarten Realty Investors has a market cap of $3.4 billion and is part of the real estate industry. Shares are up 2.4% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Weingarten Realty Investors as a hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the stock has experienced relatively poor performance when compared with the S&P 500 during the past year.

Highlights from the ratings report include:
  • WEINGARTEN REALTY INVST reported significant earnings per share improvement 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, WEINGARTEN REALTY INVST turned its bottom line around by earning $0.20 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings ($1.35 versus $0.20).
  • 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 50.3% when compared to the same quarter one year prior, rising from $40.27 million to $60.54 million.
  • 37.09% is the gross profit margin for WEINGARTEN REALTY INVST which we consider to be strong. Regardless of WRI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WRI's net profit margin of 43.98% significantly outperformed against the industry.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, WEINGARTEN REALTY INVST's return on equity is below that of both the industry average and the S&P 500.
  • In its most recent trading session, WRI 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, 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.

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