3 Hold-Rated Dividend Stocks: ACC, IVR, HPT

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 3 stocks with substantial yields, that ultimately, we have rated "Hold."

American Campus Communities

Dividend Yield: 4.10%

American Campus Communities (NYSE: ACC) shares currently have a dividend yield of 4.10%.

American Campus Communities, Inc. is an independent equity real estate investment trust. The firm invests in the real estate markets of the United States. It primarily engages in developing, owning, and managing high-quality student housing communities. The company has a P/E ratio of 73.00.

The average volume for American Campus Communities has been 781,900 shares per day over the past 30 days. American Campus Communities has a market cap of $3.7 billion and is part of the real estate industry. Shares are up 6.4% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates American Campus Communities 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 compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 41.2%. 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.
  • 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 7424.1% when compared to the same quarter one year prior, rising from $0.63 million to $47.18 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 29.30%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 150.00% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, ACC is still more expensive than most of the other companies in its industry.
  • AMERICAN CAMPUS COMMUNITIES 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, AMERICAN CAMPUS COMMUNITIES reported lower earnings of $0.55 versus $0.58 in the prior year. For the next year, the market is expecting a contraction of 15.4% in earnings ($0.47 versus $0.55).

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

Invesco Mortgage Capital

Dividend Yield: 12.50%

Invesco Mortgage Capital (NYSE: IVR) shares currently have a dividend yield of 12.50%.

Invesco Mortgage Capital Inc., a real estate investment trust (REIT), focuses on investing in, financing, and managing residential and commercial mortgage-backed securities and mortgage loans. It invests in residential mortgage-backed securities for which a U.S. The company has a P/E ratio of 6.89.

The average volume for Invesco Mortgage Capital has been 1,437,900 shares per day over the past 30 days. Invesco Mortgage Capital has a market cap of $2.2 billion and is part of the real estate industry. Shares are up 9.7% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Invesco Mortgage Capital as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and good cash flow from operations. 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 6.8%. 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.
  • The gross profit margin for INVESCO MORTGAGE CAPITAL INC is currently very high, coming in at 92.31%. Regardless of IVR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, IVR's net profit margin of -3.45% significantly underperformed when compared to the industry average.
  • INVESCO MORTGAGE CAPITAL 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, INVESCO MORTGAGE CAPITAL INC reported lower earnings of $2.89 versus $3.45 in the prior year. For the next year, the market is expecting a contraction of 22.5% in earnings ($2.24 versus $2.89).
  • 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 107.0% when compared to the same quarter one year ago, falling from $85.75 million to -$5.97 million.

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

Hospitality Properties

Dividend Yield: 7.50%

Hospitality Properties (NYSE: HPT) shares currently have a dividend yield of 7.50%.

Hospitality Properties Trust, a real estate investment trust (REIT), engages in buying, owning, and leasing hotels. The company has a P/E ratio of 37.03.

The average volume for Hospitality Properties has been 809,700 shares per day over the past 30 days. Hospitality Properties has a market cap of $3.8 billion and is part of the real estate industry. Shares are down 5.1% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Hospitality Properties as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and good cash flow from operations. 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 6.8%. 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.
  • 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, HOSPITALITY PROPERTIES TRUST underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for HOSPITALITY PROPERTIES TRUST is rather low; currently it is at 16.11%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.68% significantly 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.

Other helpful dividend tools from TheStreet:
null

If you liked this article you might like

How Walmart and Costco Could See a Future Flush With Profits Thanks to an Abundance of Cute Puppies

How Walmart and Costco Could See a Future Flush With Profits Thanks to an Abundance of Cute Puppies

Dow Chemical, REV Group, Thor Industries, American Campus Communities: 'Mad Money' Lightning Round

Dow Chemical, REV Group, Thor Industries, American Campus Communities: 'Mad Money' Lightning Round

Bonds Call the Tune Today, Not Stocks: Cramer's 'Mad Money' Recap (Thursday 2/9/17)

Bonds Call the Tune Today, Not Stocks: Cramer's 'Mad Money' Recap (Thursday 2/9/17)

Industrial REITs Best Positioned for 2017, Says S&P Capital IQ

Industrial REITs Best Positioned for 2017, Says S&P Capital IQ

New Lifetime High Reached By American Campus Communities (ACC)

New Lifetime High Reached By American Campus Communities (ACC)