What To Hold: 4 Hold-Rated Dividend Stocks NKA, CCG, IRS, DX

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."

Niska Gas Storage Partners

Dividend Yield: 9.00%

Niska Gas Storage Partners (NYSE: NKA) shares currently have a dividend yield of 9.00%.

Niska Gas Storage Partners LLC owns and operates natural gas storage assets in North America. The company has a P/E ratio of 119.77.

The average volume for Niska Gas Storage Partners has been 57,300 shares per day over the past 30 days. Niska Gas Storage Partners has a market cap of $543.5 million and is part of the utilities industry. Shares are up 2.9% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Niska Gas Storage Partners as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:
  • NKA's very impressive revenue growth greatly exceeded the industry average of 5.7%. Since the same quarter one year prior, revenues leaped by 50.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant 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 49.0% when compared to the same quarter one year prior, rising from -$15.40 million to -$7.84 million.
  • The gross profit margin for NISKA GAS STORAGE PARTNERS is rather high; currently it is at 50.11%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -21.27% is in-line with the industry average.
  • The debt-to-equity ratio of 1.24 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 0.35, which clearly demonstrates the inability to cover short-term cash needs.
  • Net operating cash flow has significantly decreased to -$59.49 million or 334.01% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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Campus Crest Communities

Dividend Yield: 7.20%

Campus Crest Communities (NYSE: CCG) shares currently have a dividend yield of 7.20%.

Campus Crest Communities, Inc., a real estate investment trust (REIT), engages in the ownership, development, building, and management of student housing properties under the Grove brand name in the United States. The company has a P/E ratio of 57.25.

The average volume for Campus Crest Communities has been 609,100 shares per day over the past 30 days. Campus Crest Communities has a market cap of $590.8 million and is part of the real estate industry. Shares are down 2.9% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Campus Crest Communities as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth 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, unimpressive growth in 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 20.2%. 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 increased to $15.47 million or 36.23% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 8.45%.
  • CAMPUS CREST COMMUNITIES INC 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. 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, CAMPUS CREST COMMUNITIES INC increased its bottom line by earning $0.16 versus $0.11 in the prior year. This year, the market expects an improvement in earnings ($0.17 versus $0.16).
  • 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 46.3% when compared to the same quarter one year ago, falling from $8.99 million to $4.83 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 on the basis of return on equity, CAMPUS CREST COMMUNITIES INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

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IRSA Inversiones y Representaciones

Dividend Yield: 7.20%

IRSA Inversiones y Representaciones (NYSE: IRS) shares currently have a dividend yield of 7.20%.

IRSA Investments and Representations Inc., through its subsidiaries, is engaged in a range of diversified real estate related activities in Argentina. The company has a P/E ratio of 21.49.

The average volume for IRSA Inversiones y Representaciones has been 48,000 shares per day over the past 30 days. IRSA Inversiones y Representaciones has a market cap of $584.5 million and is part of the real estate industry. Shares are down 19.2% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates IRSA Inversiones y Representaciones as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels 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 weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 36.6%. Since the same quarter one year prior, revenues slightly increased by 4.8%. 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, 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 Management & Development industry. The net income has significantly decreased by 35.9% when compared to the same quarter one year ago, falling from $8.78 million to $5.63 million.
  • Net operating cash flow has decreased to $35.36 million or 32.67% 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.

Dynex Capital

Dividend Yield: 13.30%

Dynex Capital (NYSE: DX) shares currently have a dividend yield of 13.30%.

Dynex Capital, Inc., a mortgage real estate investment trust (REIT), invests in mortgage assets in the United States. The company has a P/E ratio of 7.54.

The average volume for Dynex Capital has been 358,100 shares per day over the past 30 days. Dynex Capital has a market cap of $443.1 million and is part of the real estate industry. Shares are up 0.1% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Dynex Capital as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $56.02 million or 49.17% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 8.45%.
  • The gross profit margin for DYNEX CAPITAL INC is currently very high, coming in at 88.51%. Regardless of DX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DX's net profit margin of -14.64% significantly underperformed when compared to the industry average.
  • The share price of DYNEX CAPITAL INC has not done very well: it is down 17.73% 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. 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 124.1% when compared to the same quarter one year ago, falling from $19.17 million to -$4.63 million.

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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