What To Hold: 3 Hold-Rated Dividend Stocks CCG, NKA, WHF

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."

Campus Crest Communities

Dividend Yield: 7.60%

Campus Crest Communities (NYSE: CCG) shares currently have a dividend yield of 7.60%.

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 average volume for Campus Crest Communities has been 646,500 shares per day over the past 30 days. Campus Crest Communities has a market cap of $557.9 million and is part of the real estate industry. Shares are down 6.8% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Campus Crest Communities as a hold. The company's strongest point has been its expanding profit margins. At the same time, however, 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:
  • CCG, with its decline in revenue, underperformed when compared the industry average of 9.8%. Since the same quarter one year prior, revenues slightly dropped by 9.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CAMPUS CREST COMMUNITIES INC swung to a loss, reporting -$0.02 versus $0.16 in the prior year. This year, the market expects an improvement in earnings (-$0.01 versus -$0.02).
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.13%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 250.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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 50.7% when compared to the same quarter one year ago, falling from $2.16 million to $1.06 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, CAMPUS CREST COMMUNITIES INC's return on equity significantly trails that of both the industry average and the S&P 500.

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

Niska Gas Storage Partners

Dividend Yield: 10.80%

Niska Gas Storage Partners (NYSE: NKA) shares currently have a dividend yield of 10.80%.

Niska Gas Storage Partners LLC owns and operates natural gas storage assets in North America.

The average volume for Niska Gas Storage Partners has been 179,500 shares per day over the past 30 days. Niska Gas Storage Partners has a market cap of $458.6 million and is part of the utilities industry. Shares are down 7.3% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Niska Gas Storage Partners as a hold. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:
  • NISKA GAS STORAGE PARTNERS 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, NISKA GAS STORAGE PARTNERS continued to lose money by earning -$0.63 versus -$2.38 in the prior year. This year, the market expects an improvement in earnings ($0.76 versus -$0.63).
  • NKA, with its very weak revenue results, has greatly underperformed against the industry average of 3.1%. Since the same quarter one year prior, revenues plummeted by 65.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, NISKA GAS STORAGE PARTNERS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio of 1.41 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, NKA has a quick ratio of 0.54, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 228.7% when compared to the same quarter one year ago, falling from $10.42 million to -$13.41 million.

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

WhiteHorse Finance

Dividend Yield: 10.70%

WhiteHorse Finance (NASDAQ: WHF) shares currently have a dividend yield of 10.70%.

Whitehorse Finance, LLC is a fund of HIG Capital LLC. The company has a P/E ratio of 10.48.

The average volume for WhiteHorse Finance has been 52,200 shares per day over the past 30 days. WhiteHorse Finance has a market cap of $199.4 million and is part of the financial services industry. Shares are down 11.7% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates WhiteHorse Finance as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, notable return on equity and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

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 Capital Markets industry. The net income increased by 81.6% when compared to the same quarter one year prior, rising from $3.51 million to $6.37 million.
  • Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, WHITEHORSE FINANCE INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.1%. Since the same quarter one year prior, revenues slightly dropped by 1.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • WHITEHORSE FINANCE INC 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 year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, WHITEHORSE FINANCE INC increased its bottom line by earning $1.26 versus $0.53 in the prior year. For the next year, the market is expecting a contraction of 7.5% in earnings ($1.17 versus $1.26).
  • WHF has underperformed the S&P 500 Index, declining 15.66% from its price level of one year ago. 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.

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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