What To Hold: 3 Hold-Rated Dividend Stocks NSLP, EVEP, CORR

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."

New Source Energy Partners

Dividend Yield: 10.10%

New Source Energy Partners (NYSE: NSLP) shares currently have a dividend yield of 10.10%.

New Source Energy Partners L.P. is engaged in the acquisition and development of oil and natural gas properties in the United States.

The average volume for New Source Energy Partners has been 59,400 shares per day over the past 30 days. New Source Energy Partners has a market cap of $230.9 million and is part of the energy industry. Shares are down 3.1% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates New Source Energy Partners as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and compelling growth in net income. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:
  • NSLP's very impressive revenue growth greatly exceeded the industry average of 3.1%. Since the same quarter one year prior, revenues leaped by 99.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, NEW SOURCE ENERGY PRTRS LP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • 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. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • NEW SOURCE ENERGY PRTRS LP 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, NEW SOURCE ENERGY PRTRS LP increased its bottom line by earning $2.92 versus $0.14 in the prior year. For the next year, the market is expecting a contraction of 44.5% in earnings ($1.62 versus $2.92).
  • NSLP's debt-to-equity ratio of 0.61 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.15 is sturdy.

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

EV Energy Partners

Dividend Yield: 9.20%

EV Energy Partners (NASDAQ: EVEP) shares currently have a dividend yield of 9.20%.

EV Energy Partners, L.P. is engaged in the acquisition, development, and production of oil and natural gas properties in the United States. The company operates in two segments, Exploration and Production, and Midstream.

The average volume for EV Energy Partners has been 226,100 shares per day over the past 30 days. EV Energy Partners has a market cap of $1.6 billion and is part of the energy industry. Shares are up 0.9% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates EV Energy Partners as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth 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, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • EVEP's revenue growth has slightly outpaced the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 4.1%. 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.
  • EVEP's debt-to-equity ratio of 0.91 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.02 is sturdy.
  • EV ENERGY PARTNERS LP 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 two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, EV ENERGY PARTNERS LP reported poor results of -$1.69 versus -$0.35 in the prior year. This year, the market expects an improvement in earnings ($1.38 versus -$1.69).
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, EV ENERGY PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $33.26 million or 3.53% 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.

CorEnergy Infrastructure

Dividend Yield: 7.30%

CorEnergy Infrastructure (NYSE: CORR) shares currently have a dividend yield of 7.30%.

CorEnergy Infrastructure Trust, Inc. is a trust launched and managed by Corridor InfraTrust Management, LLC. The trust primarily owns midstream and downstream U.S. energy infrastructure assets subject to long-term triple net participating leases with energy companies. The company has a P/E ratio of 43.94.

The average volume for CorEnergy Infrastructure has been 117,400 shares per day over the past 30 days. CorEnergy Infrastructure has a market cap of $222.4 million and is part of the financial services industry. Shares are down 2.1% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates CorEnergy Infrastructure as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • CORR's very impressive revenue growth greatly exceeded the industry average of 5.1%. Since the same quarter one year prior, revenues leaped by 172.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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 Capital Markets industry. The net income increased by 535.3% when compared to the same quarter one year prior, rising from -$0.36 million to $1.58 million.
  • CORENERGY INFRASTRUCTURE TR 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, CORENERGY INFRASTRUCTURE TR reported lower earnings of $0.18 versus $1.35 in the prior year. This year, the market expects an improvement in earnings ($0.28 versus $0.18).
  • CORR has underperformed the S&P 500 Index, declining 7.60% from its price level of one year ago. 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.
  • 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 Capital Markets industry and the overall market on the basis of return on equity, CORENERGY INFRASTRUCTURE TR underperformed against that of the industry average and is significantly less than that of 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.

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