What To Hold: 3 Hold-Rated Dividend Stocks POT, HTA, SID

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 which could 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."

Potash Corporation of Saskatchewan

Dividend Yield: 4.10%

Potash Corporation of Saskatchewan (NYSE: POT) shares currently have a dividend yield of 4.10%.

Potash Corporation of Saskatchewan Inc., together with its subsidiaries, produces and sells fertilizers and related industrial and feed products worldwide. It mines and produces potash, which is primarily used as fertilizer. The company has a P/E ratio of 16.78.

The average volume for Potash Corporation of Saskatchewan has been 6,386,800 shares per day over the past 30 days. Potash Corporation of Saskatchewan has a market cap of $29.2 billion and is part of the chemicals industry. Shares are up 5.4% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Potash Corporation of Saskatchewan as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures 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 current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that POT's debt-to-equity ratio is low, the quick ratio, which is currently 0.65, displays a potential problem in covering short-term cash needs.
  • 38.74% is the gross profit margin for POTASH CORP SASK INC which we consider to be strong. Regardless of POT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, POT's net profit margin of 14.92% compares favorably to the industry average.
  • POT, with its decline in revenue, underperformed when compared the industry average of 13.5%. Since the same quarter one year prior, revenues slightly dropped by 6.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 significantly decreased by 45.4% when compared to the same quarter one year ago, falling from $421.00 million to $230.00 million.
  • Net operating cash flow has decreased to $656.00 million or 24.77% 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.

Healthcare Trust of America

Dividend Yield: 5.00%

Healthcare Trust of America (NYSE: HTA) shares currently have a dividend yield of 5.00%.

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 115.00.

The average volume for Healthcare Trust of America has been 1,555,300 shares per day over the past 30 days. Healthcare Trust of America has a market cap of $2.7 billion and is part of the real estate industry. Shares are up 16% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Healthcare Trust of America as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • HTA's revenue growth has slightly outpaced the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 13.9%. 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. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, HEALTHCARE TRUST OF AMERICA turned its bottom line around by earning $0.11 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings ($0.15 versus $0.11).
  • The gross profit margin for HEALTHCARE TRUST OF AMERICA is rather low; currently it is at 17.59%. 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 4.85% is significantly lower than the industry average.
  • Net operating cash flow has decreased to $29.15 million or 11.62% 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.

Companhia Siderurgica Nacional

Dividend Yield: 5.70%

Companhia Siderurgica Nacional (NYSE: SID) shares currently have a dividend yield of 5.70%.

Companhia Siderurgica Nacional operates as an integrated steel producer primarily in Brazil. The company principally produces carbon steel and various steel products for automotive, home appliance, packaging, construction, and steel processing industries.

The average volume for Companhia Siderurgica Nacional has been 6,202,500 shares per day over the past 30 days. Companhia Siderurgica Nacional has a market cap of $6.0 billion and is part of the metals & mining industry. Shares are down 32.4% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Companhia Siderurgica Nacional as a hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. 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:
  • 39.99% is the gross profit margin for COMPANHIA SIDERURGICA NACION which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -13.88% is in-line with the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, COMPANHIA SIDERURGICA NACION has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Net operating cash flow has significantly decreased to $299.69 million or 69.19% 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.
  • 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 Metals & Mining industry. The net income has significantly decreased by 247.7% when compared to the same quarter one year ago, falling from $165.67 million to -$244.66 million.

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

More from Markets

Dow Futures Plunge, Global Markets Rocked as Trump Takes Trade War to Next Level

Dow Futures Plunge, Global Markets Rocked as Trump Takes Trade War to Next Level

Asia Markets Fall on Latest Tariff Threats From Trump

Asia Markets Fall on Latest Tariff Threats From Trump

Google Invests in JD.com; Comcast-Disney Battle Nears Head -- ICYMI

Google Invests in JD.com; Comcast-Disney Battle Nears Head -- ICYMI

REPLAY: Jim Cramer on Tariff Worries, Oil, Alphabet and Centene

REPLAY: Jim Cramer on Tariff Worries, Oil, Alphabet and Centene

Video: Athens Stock Exchange CEO on What's Next for Greece's Debt Woes

Video: Athens Stock Exchange CEO on What's Next for Greece's Debt Woes