What To Hold: 5 Hold-Rated Dividend Stocks WGL, EVEP, CY, NRF, CM

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."

WGL Holdings

Dividend Yield: 4.30%

WGL Holdings (NYSE: WGL) shares currently have a dividend yield of 4.30%.

WGL Holdings, Inc., through its subsidiaries, sells and delivers natural gas, and provides energy-related products and services. The company operates in four segments: Regulated Utility, Retail Energy-Marketing, Commercial Energy Systems, and Midstream Energy Services. The company has a P/E ratio of 25.10.

The average volume for WGL Holdings has been 307,800 shares per day over the past 30 days. WGL Holdings has a market cap of $2.0 billion and is part of the utilities industry. Shares are down 3% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates WGL Holdings 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 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, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The debt-to-equity ratio is somewhat low, currently at 0.74, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.24 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Net operating cash flow has increased to -$68.35 million or 31.80% when compared to the same quarter last year. Despite an increase in cash flow, WGL HOLDINGS INC's cash flow growth rate is still lower than the industry average growth rate of 54.36%.
  • WGL, with its decline in revenue, underperformed when compared the industry average of 15.1%. Since the same quarter one year prior, revenues slightly dropped by 2.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • In its most recent trading session, WGL 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.
  • 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 Gas Utilities industry and the overall market, WGL HOLDINGS INC'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.

EV Energy Partner

Dividend Yield: 9.30%

EV Energy Partner (NASDAQ: EVEP) shares currently have a dividend yield of 9.30%.

EV Energy Partners, L.P. engages in the acquisition, development, and production of oil and natural gas properties in the United States.

The average volume for EV Energy Partner has been 389,400 shares per day over the past 30 days. EV Energy Partner has a market cap of $1.6 billion and is part of the energy industry. Shares are down 4.2% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates EV Energy Partner as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.6%. Since the same quarter one year prior, revenues rose by 18.5%. 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 75.4% when compared to the same quarter one year prior, rising from -$50.02 million to -$12.31 million.
  • The gross profit margin for EV ENERGY PARTNERS LP is rather high; currently it is at 63.11%. 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 -15.12% is in-line with the industry average.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, EV ENERGY PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $48.83 million or 21.23% 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.

Cypress Semiconductor Corporation

Dividend Yield: 4.30%

Cypress Semiconductor Corporation (NASDAQ: CY) shares currently have a dividend yield of 4.30%.

Cypress Semiconductor Corporation, together with its subsidiaries, designs, develops, manufactures, and markets mixed-signal, programmable solutions, specialized semiconductor memories, and integrated semiconductor solutions.

The average volume for Cypress Semiconductor Corporation has been 2,414,300 shares per day over the past 30 days. Cypress Semiconductor Corporation has a market cap of $1.5 billion and is part of the electronics industry. Shares are down 3.4% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Cypress Semiconductor Corporation as a hold. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.4%. Since the same quarter one year prior, revenues slightly dropped by 7.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for CYPRESS SEMICONDUCTOR CORP is rather high; currently it is at 57.50%. Regardless of CY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CY's net profit margin of -4.42% significantly underperformed when compared to the industry average.
  • CYPRESS SEMICONDUCTOR CORP 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, CYPRESS SEMICONDUCTOR CORP swung to a loss, reporting -$0.16 versus $0.89 in the prior year. This year, the market expects an improvement in earnings ($0.38 versus -$0.16).
  • The debt-to-equity ratio of 1.37 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, CY has a quick ratio of 0.62, this demonstrates the lack of ability of the company to cover short-term liquidity 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. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, CYPRESS SEMICONDUCTOR CORP'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.

Northstar Realty Finance Corporation

Dividend Yield: 5.90%

Northstar Realty Finance Corporation (NYSE: NRF) shares currently have a dividend yield of 5.90%.

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 7,131,200 shares per day over the past 30 days. Northstar Realty Finance Corporation has a market cap of $4.2 billion and is part of the real estate industry. Shares are up 4.8% 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 87.43% 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.

Canadian Imperial Bank of Commerce

Dividend Yield: 4.40%

Canadian Imperial Bank of Commerce (NYSE: CM) shares currently have a dividend yield of 4.40%.

Canadian Imperial Bank of Commerce, a diversified financial institution, provides various financial products and services to individuals, small businesses, and commercial, corporate, and institutional clients in Canada and internationally. The company has a P/E ratio of 10.33.

The average volume for Canadian Imperial Bank of Commerce has been 159,300 shares per day over the past 30 days. Canadian Imperial Bank of Commerce has a market cap of $32.5 billion and is part of the banking industry. Shares are down 4.3% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Canadian Imperial Bank of Commerce as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow.

Highlights from the ratings report include:
  • CM's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 1.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CANADIAN IMPERIAL BANK'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, CANADIAN IMPERIAL BANK increased its bottom line by earning $8.24 versus $7.85 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Commercial Banks industry average. The net income has decreased by 0.8% when compared to the same quarter one year ago, dropping from $850.00 million to $843.00 million.
  • Net operating cash flow has declined marginally to $2,943.00 million or 6.45% 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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