4 Hold-Rated Dividend Stocks: BMR, ARCP, PKY, RGC

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."

BioMed Realty

Dividend Yield: 5.10%

BioMed Realty (NYSE: BMR) shares currently have a dividend yield of 5.10%.

BioMed Realty Trust, Inc. operates as a real estate investment trust (REIT) that focuses on providing real estate to the life science industry in the United States. The company has a P/E ratio of 114.76.

The average volume for BioMed Realty has been 1,125,800 shares per day over the past 30 days. BioMed Realty has a market cap of $3.7 billion and is part of the real estate industry. Shares are up 5.5% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates BioMed Realty as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth and notable return on equity. 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 poor profit margins.

Highlights from the ratings report include:
  • BMR's revenue growth has slightly outpaced the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 18.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • BIOMED REALTY TRUST INC reported flat earnings per share in the most recent quarter. 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, BIOMED REALTY TRUST INC reported lower earnings of $0.01 versus $0.18 in the prior year. This year, the market expects an improvement in earnings ($0.16 versus $0.01).
  • 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, BIOMED REALTY TRUST INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • 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 33.7% when compared to the same quarter one year ago, falling from $6.41 million to $4.25 million.
  • In its most recent trading session, BMR 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.

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American Realty Capital Properties Inc Clas

Dividend Yield: 7.20%

American Realty Capital Properties Inc Clas (NASDAQ: ARCP) shares currently have a dividend yield of 7.20%.

American Realty Capital Properties, Inc. owns and acquires single tenant, freestanding commercial real estate that is net leased on a medium-term basis, primarily to investment grade credit rated and other creditworthy tenants. The company principally invests in retail and office properties.

The average volume for American Realty Capital Properties Inc Clas has been 6,112,500 shares per day over the past 30 days. American Realty Capital Properties Inc Clas has a market cap of $2.6 billion and is part of the real estate industry. Shares are up 7.7% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates American Realty Capital Properties Inc Clas 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 increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • ARCP's very impressive revenue growth greatly exceeded the industry average of 9.7%. Since the same quarter one year prior, revenues leaped by 223.6%. 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 significantly increased by 622.25% to $16.29 million when compared to the same quarter last year. In addition, AMERICAN RLTY CAP PPTY INC has also vastly surpassed the industry average cash flow growth rate of -0.44%.
  • The gross profit margin for AMERICAN RLTY CAP PPTY INC is currently extremely low, coming in at 5.92%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, ARCP's net profit margin of -97.00% significantly underperformed when compared to 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 365.4% when compared to the same quarter one year ago, falling from -$12.69 million to -$59.06 million.

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

Parkway Properties

Dividend Yield: 4.20%

Parkway Properties (NYSE: PKY) shares currently have a dividend yield of 4.20%.

Parkway Properties, Inc., a real estate investment trust (REIT), engages in the operation, acquisition, ownership, management, and leasing of office properties. It operates and invests principally in office properties in the southeastern and southwestern United States and Chicago.

The average volume for Parkway Properties has been 779,700 shares per day over the past 30 days. Parkway Properties has a market cap of $1.7 billion and is part of the real estate industry. Shares are down 11.5% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Parkway Properties 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 increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including 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 9.7%. Since the same quarter one year prior, revenues rose by 32.0%. 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 significantly increased by 79.07% to $34.45 million when compared to the same quarter last year. In addition, PARKWAY PROPERTIES INC has also vastly surpassed the industry average cash flow growth rate of -0.44%.
  • 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 Investment Trusts (REITs) industry. The net income has significantly decreased by 208.3% when compared to the same quarter one year ago, falling from $2.13 million to -$2.31 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, PARKWAY PROPERTIES INC's return on equity significantly trails that of both the industry average and the S&P 500.

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Regal Entertainment Group

Dividend Yield: 4.30%

Regal Entertainment Group (NYSE: RGC) shares currently have a dividend yield of 4.30%.

Regal Entertainment Group, through its subsidiaries, operates as a motion picture exhibitor in the United States. The company develops, acquires, and operates multi-screen theatres primarily in mid-sized metropolitan markets and suburban growth areas of larger metropolitan markets. The company has a P/E ratio of 17.73.

The average volume for Regal Entertainment Group has been 880,600 shares per day over the past 30 days. Regal Entertainment Group has a market cap of $2.6 billion and is part of the media industry. Shares are down 2.6% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Regal Entertainment Group as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 17.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 220.00% and other important driving factors, this stock has surged by 32.72% 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.
  • Net operating cash flow has significantly increased by 86.11% to -$1.00 million when compared to the same quarter last year. In addition, REGAL ENTERTAINMENT GROUP has also vastly surpassed the industry average cash flow growth rate of -6.65%.
  • The gross profit margin for REGAL ENTERTAINMENT GROUP is rather low; currently it is at 22.33%. Regardless of RGC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.23% 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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