What To Hold: 4 Hold-Rated Dividend Stocks SPH, GOOD, LRE, CPG

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."

Suburban Propane Partners

Dividend Yield: 7.80%

Suburban Propane Partners (NYSE: SPH) shares currently have a dividend yield of 7.80%.

Suburban Propane Partners, L.P., through its subsidiaries, is engaged in the retail marketing and distribution of propane, fuel oil, and refined fuels. The company has a P/E ratio of 33.66.

The average volume for Suburban Propane Partners has been 152,000 shares per day over the past 30 days. Suburban Propane Partners has a market cap of $2.7 billion and is part of the utilities industry. Shares are down 3.7% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Suburban Propane Partners 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 largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and unimpressive growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 15.1%. Since the same quarter one year prior, revenues slightly increased by 7.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SUBURBAN PROPANE PRTNRS -LP has improved earnings per share by 18.6% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SUBURBAN PROPANE PRTNRS -LP increased its bottom line by earning $1.44 versus $0.48 in the prior year. This year, the market expects an improvement in earnings ($2.16 versus $1.44).
  • Even though the current debt-to-equity ratio is 1.10, it is still below the industry average, suggesting that this level of debt is acceptable within the Gas Utilities industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.86 is weak.
  • The gross profit margin for SUBURBAN PROPANE PRTNRS -LP is currently extremely low, coming in at 6.27%. Regardless of SPH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SPH's net profit margin of -25.90% significantly underperformed when compared to the industry average.
  • Net operating cash flow has significantly decreased to $13.84 million or 63.31% 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.

Gladstone Commercial Corporation

Dividend Yield: 8.10%

Gladstone Commercial Corporation (NASDAQ: GOOD) shares currently have a dividend yield of 8.10%.

Gladstone Commercial Corporation operates as a real estate investment trust (REIT) in the United States. It engages in investing in and owning net leased industrial and commercial real properties, and making long-term industrial and commercial mortgage loans.

The average volume for Gladstone Commercial Corporation has been 97,600 shares per day over the past 30 days. Gladstone Commercial Corporation has a market cap of $291.0 million and is part of the real estate industry. Shares are up 3.6% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Gladstone Commercial Corporation 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 expanding profit margins. 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.
  • Net operating cash flow has slightly increased to $8.03 million or 2.16% when compared to the same quarter last year. Despite an increase in cash flow, GLADSTONE COMMERCIAL CORP's average is still marginally south of the industry average growth rate of 8.60%.
  • 46.64% is the gross profit margin for GLADSTONE COMMERCIAL CORP which we consider to be strong. Regardless of GOOD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GOOD's net profit margin of 1.92% 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 68.6% when compared to the same quarter one year ago, falling from $0.99 million to $0.31 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 Real Estate Investment Trusts (REITs) industry and the overall market, GLADSTONE COMMERCIAL 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.

LRR Energy

Dividend Yield: 11.00%

LRR Energy (NYSE: LRE) shares currently have a dividend yield of 11.00%.

LRR Energy, L.P., through its subsidiary, LRE Operating, LLC, engages in the acquisition, exploitation, development, and operation of oil and natural gas properties in North America. The company has a P/E ratio of 34.94.

The average volume for LRR Energy has been 112,100 shares per day over the past 30 days. LRR Energy has a market cap of $346.6 million and is part of the energy industry. Shares are up 5% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates LRR Energy as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income 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:
  • LRE's very impressive revenue growth greatly exceeded the industry average of 5.7%. Since the same quarter one year prior, revenues leaped by 111.8%. 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 101.8% when compared to the same quarter one year prior, rising from -$15.28 million to $0.28 million.
  • LRR ENERGY LP reported significant earnings per share improvement 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, LRR ENERGY LP reported lower earnings of $0.00 versus $2.42 in the prior year. This year, the market expects an increase in earnings to $0.81 from $0.00.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, LRR ENERGY LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • In its most recent trading session, LRE 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, 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.

Crescent Point Energy

Dividend Yield: 7.20%

Crescent Point Energy (NYSE: CPG) shares currently have a dividend yield of 7.20%.

Crescent Point Energy Corp. engages in the acquisition, exploration, development, and production of oil and natural gas properties in Western Canada and the United States. The company has a P/E ratio of 399.00.

The average volume for Crescent Point Energy has been 16,900 shares per day over the past 30 days. Crescent Point Energy has a market cap of $14.2 billion and is part of the energy industry. Shares are unchanged year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Crescent Point Energy as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 42.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for CRESCENT POINT ENERGY CORP is currently very high, coming in at 74.66%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.08% is above that of the industry average.
  • CPG's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.44 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • CPG has underperformed the S&P 500 Index, declining 8.99% 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.
  • 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, CRESCENT POINT ENERGY 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.

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