What To Hold: 5 Hold-Rated Dividend Stocks SQM, VIP, TE, HTA, 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."

Sociedad Quimica Y Minera De Chile

Dividend Yield: 4.60%

Sociedad Quimica Y Minera De Chile (NYSE: SQM) shares currently have a dividend yield of 4.60%.

Chemical and Mining Company of Chile Inc. engages in the production and distribution of specialty plant nutrients, iodine and its derivatives, lithium and its derivatives, potassium chloride and potassium sulfate, industrial chemicals, and other commodity fertilizers. The company has a P/E ratio of 10.49.

The average volume for Sociedad Quimica Y Minera De Chile has been 772,100 shares per day over the past 30 days. Sociedad Quimica Y Minera De Chile has a market cap of $6.8 billion and is part of the chemicals industry. Shares are up 3.1% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Sociedad Quimica Y Minera De Chile as a hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • 39.06% is the gross profit margin for SOC QUIMICA Y MINERA DE CHI which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, SQM's net profit margin of 26.65% significantly outperformed against the industry.
  • Net operating cash flow has slightly increased to $179.68 million or 6.53% when compared to the same quarter last year. Despite an increase in cash flow, SOC QUIMICA Y MINERA DE CHI's average is still marginally south of the industry average growth rate of 7.90%.
  • Looking at the price performance of SQM's shares over the past 12 months, there is not much good news to report: the stock is down 54.52%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • 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 Chemicals industry. The net income has decreased by 15.9% when compared to the same quarter one year ago, dropping from $165.18 million to $138.91 million.

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

VimpelCom

Dividend Yield: 9.00%

VimpelCom (NASDAQ: VIP) shares currently have a dividend yield of 9.00%.

VimpelCom Ltd., a telecommunications service operator, provides voice and data services through a range of traditional and broadband mobile and fixed technologies. The company has a P/E ratio of 8.22.

The average volume for VimpelCom has been 2,183,200 shares per day over the past 30 days. VimpelCom has a market cap of $16.3 billion and is part of the telecommunications industry. Shares are down 22.9% year-to-date as of the close of trading on Monday.

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

Highlights from the ratings report include:
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Wireless Telecommunication Services industry and the overall market, VIMPELCOM LTD's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for VIMPELCOM LTD is currently very high, coming in at 73.93%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, VIP's net profit margin of 4.48% significantly trails the industry average.
  • Currently the debt-to-equity ratio of 1.90 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, VIP maintains a poor quick ratio of 0.85, which illustrates the inability to avoid short-term cash problems.
  • Net operating cash flow has decreased to $1,675.00 million or 16.16% 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.

TECO Energy

Dividend Yield: 5.40%

TECO Energy (NYSE: TE) shares currently have a dividend yield of 5.40%.

TECO Energy, Inc., an electric and gas utility holding company, engages in the regulated electric and gas utility operations. The company has a P/E ratio of 17.73.

The average volume for TECO Energy has been 2,536,000 shares per day over the past 30 days. TECO Energy has a market cap of $3.5 billion and is part of the utilities industry. Shares are down 4% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates TECO Energy as a hold. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and generally higher debt management risk.

Highlights from the ratings report include:
  • Net operating cash flow has slightly increased to $152.50 million or 2.28% when compared to the same quarter last year. In addition, TECO ENERGY INC has also vastly surpassed the industry average cash flow growth rate of -56.71%.
  • Despite the stagnant revenue growth, the company outperformed against the industry average of 31.9%. Since the same quarter one year prior, revenues have remained constant. Even though the company's revenue remained stagnant, the earnings per share decreased.
  • TECO ENERGY INC' earnings per share from the most recent quarter came in slightly below the year earlier 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, TECO ENERGY INC reported lower earnings of $0.92 versus $1.13 in the prior year. This year, the market expects an improvement in earnings ($1.03 versus $0.92).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Multi-Utilities industry. The net income has decreased by 6.9% when compared to the same quarter one year ago, dropping from $45.10 million to $42.00 million.
  • The debt-to-equity ratio of 1.29 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, TE has a quick ratio of 0.62, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

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

Healthcare Trust of America

Dividend Yield: 5.30%

Healthcare Trust of America (NYSE: HTA) shares currently have a dividend yield of 5.30%.

Healthcare Trust of America is a fully integrated, self-administered and internally managed real estate investment trust, or REIT. The company acquires, owns and operates medical office buildings and other facilities that serve the healthcare industry. The company has a P/E ratio of 134.88.

The average volume for Healthcare Trust of America has been 1,585,400 shares per day over the past 30 days. Healthcare Trust of America has a market cap of $2.6 billion and is part of the real estate industry. Shares are up 10.2% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Healthcare Trust of America as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, 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 and poor profit margins.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 263.4% when compared to the same quarter one year prior, rising from -$2.95 million to $4.82 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 6.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HEALTHCARE TRUST OF AMERICA 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, HEALTHCARE TRUST OF AMERICA reported poor results of -$0.10 versus $0.00 in the prior year. This year, the market expects an improvement in earnings ($0.14 versus -$0.10).
  • The gross profit margin for HEALTHCARE TRUST OF AMERICA is rather low; currently it is at 24.00%. Regardless of HTA's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, HTA's net profit margin of 5.84% is significantly lower than the industry average.
  • In its most recent trading session, HTA 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.

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: 4.60%

Canadian Imperial Bank of Commerce (NYSE: CM) shares currently have a dividend yield of 4.60%.

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 10.04.

The average volume for Canadian Imperial Bank of Commerce has been 168,200 shares per day over the past 30 days. Canadian Imperial Bank of Commerce has a market cap of $31.6 billion and is part of the banking industry. Shares are down 7.2% year-to-date as of the close of trading on Monday.

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, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 20.3%. Since the same quarter one year prior, revenues slightly increased by 0.2%. 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.
  • In its most recent trading session, CM 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. 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 underperformed when compared to that of the S&P 500 and 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.

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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