What To Hold: 5 Hold-Rated Dividend Stocks HME, POM, ATLS, BDN, HPT

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."

Home Properties

Dividend Yield: 5.10%

Home Properties (NYSE: HME) shares currently have a dividend yield of 5.10%.

Home Properties, Inc. is an independent real estate investment trust. The firm invests in the real estate markets of the United States. It is engaged in the ownership, management, acquisition, rehabilitation and development of residential apartment communities. The company has a P/E ratio of 33.05.

The average volume for Home Properties has been 401,900 shares per day over the past 30 days. Home Properties has a market cap of $3.1 billion and is part of the real estate industry. Shares are up 2.3% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Home Properties as a hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • HOME PROPERTIES INC has improved earnings per share by 22.2% 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, HOME PROPERTIES INC increased its bottom line by earning $1.36 versus $0.81 in the prior year. This year, the market expects an improvement in earnings ($1.54 versus $1.36).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.6%. Since the same quarter one year prior, revenues slightly increased by 3.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has slightly increased to $68.95 million or 6.32% when compared to the same quarter last year. Despite an increase in cash flow, HOME PROPERTIES INC's average is still marginally south of the industry average growth rate of 8.55%.
  • HME has underperformed the S&P 500 Index, declining 12.41% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • 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 31.2% when compared to the same quarter one year ago, falling from $36.41 million to $25.04 million.

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

Pepco Holdings

Dividend Yield: 5.70%

Pepco Holdings (NYSE: POM) shares currently have a dividend yield of 5.70%.

Pepco Holdings, Inc., through its subsidiaries, engages in the transmission, distribution, and supply of electricity. The company also distributes and supplies natural gas. The company has a P/E ratio of 29.03.

The average volume for Pepco Holdings has been 1,896,100 shares per day over the past 30 days. Pepco Holdings has a market cap of $4.7 billion and is part of the utilities industry. Shares are down 1.8% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Pepco Holdings as a hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, good cash flow from operations and increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:
  • PEPCO HOLDINGS INC has improved earnings per share by 15.8% 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, PEPCO HOLDINGS INC reported lower earnings of $0.98 versus $1.14 in the prior year. This year, the market expects an improvement in earnings ($1.12 versus $0.98).
  • Net operating cash flow has slightly increased to $302.00 million or 2.37% when compared to the same quarter last year. Despite an increase in cash flow, PEPCO HOLDINGS INC's average is still marginally south of the industry average growth rate of 4.41%.
  • POM, with its decline in revenue, slightly underperformed the industry average of 2.0%. Since the same quarter one year prior, revenues slightly dropped by 3.2%. The declining revenue has not hurt the company's bottom line, with increasing 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. Compared to other companies in the Electric Utilities industry and the overall market on the basis of return on equity, PEPCO HOLDINGS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • POM has underperformed the S&P 500 Index, declining 7.07% from its price level of one year ago. 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.

Atlas Energy

Dividend Yield: 4.10%

Atlas Energy (NYSE: ATLS) shares currently have a dividend yield of 4.10%.

Atlas Energy, L.P. engages in the development and production of natural gas, crude oil, and natural gas liquids in basins across the United States. It also sponsors and manages tax-advantaged natural gas and oil investment partnerships.

The average volume for Atlas Energy has been 459,200 shares per day over the past 30 days. Atlas Energy has a market cap of $2.3 billion and is part of the utilities industry. Shares are down 3.6% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Atlas Energy as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth and solid stock price performance. 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:
  • ATLS's very impressive revenue growth greatly exceeded the industry average of 5.6%. Since the same quarter one year prior, revenues leaped by 86.3%. 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 closing price of one year ago, ATLS's share price has jumped by 33.11%, exceeding the performance of the broader market during that same time frame. 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.
  • ATLAS ENERGY LP 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ATLAS ENERGY LP swung to a loss, reporting -$1.02 versus $1.00 in the prior year. This year, the market expects an improvement in earnings ($0.05 versus -$1.02).
  • The gross profit margin for ATLAS ENERGY LP is rather low; currently it is at 22.03%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.00% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $24.82 million or 52.81% 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.

Brandywine Realty

Dividend Yield: 4.30%

Brandywine Realty (NYSE: BDN) shares currently have a dividend yield of 4.30%.

Brandywine Realty Trust is a publically owned real estate investment trust. The firm invests in real estate markets of the United States. It makes investments in office, mixed-use, and industrial properties.

The average volume for Brandywine Realty has been 968,000 shares per day over the past 30 days. Brandywine Realty has a market cap of $2.2 billion and is part of the real estate industry. Shares are down 0.9% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Brandywine Realty as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and poor profit margins.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.6%. Since the same quarter one year prior, revenues slightly increased by 6.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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 gross profit margin for BRANDYWINE REALTY TRUST is rather low; currently it is at 21.62%. Regardless of BDN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, BDN's net profit margin of 7.60% is significantly lower than 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 34.7% when compared to the same quarter one year ago, falling from $16.83 million to $10.98 million.

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

Hospitality Properties

Dividend Yield: 7.00%

Hospitality Properties (NYSE: HPT) shares currently have a dividend yield of 7.00%.

Hospitality Properties Trust, a real estate investment trust (REIT), engages in buying, owning, and leasing hotels. The company has a P/E ratio of 39.87.

The average volume for Hospitality Properties has been 1,102,000 shares per day over the past 30 days. Hospitality Properties has a market cap of $4.1 billion and is part of the real estate industry. Shares are up 0.6% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Hospitality Properties as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and good cash flow from operations. 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 revenue growth came in higher than the industry average of 9.6%. Since the same quarter one year prior, revenues rose by 24.8%. 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.
  • 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 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 Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, HOSPITALITY PROPERTIES TRUST underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for HOSPITALITY PROPERTIES TRUST is rather low; currently it is at 16.11%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.68% significantly trails 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.

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