3 Hold-Rated Dividend Stocks: IEP, CBL, AEO

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."

Icahn

Dividend Yield: 5.90%

Icahn (NASDAQ: IEP) shares currently have a dividend yield of 5.90%.

Icahn Enterprises L.P. is engaged in the investment, automotive, energy, metals, railcar, gaming, food packaging, real estate, and home fashion businesses in the United States and Internationally. The company has a P/E ratio of 16.15.

The average volume for Icahn has been 172,000 shares per day over the past 30 days. Icahn has a market cap of $12.1 billion and is part of the conglomerates industry. Shares are down 6.5% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Icahn as a hold. Among the primary strengths of the company is its solid stock price performance. At the same time, however, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • ICAHN ENTERPRISES 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. 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, ICAHN ENTERPRISES LP increased its bottom line by earning $8.98 versus $3.72 in the prior year. This year, the market expects an improvement in earnings ($9.41 versus $8.98).
  • IEP, with its decline in revenue, underperformed when compared the industry average of 3.4%. Since the same quarter one year prior, revenues slightly dropped by 8.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has significantly decreased to -$802.00 million or 2056.09% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much 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 Auto Components industry. The net income has significantly decreased by 110.5% when compared to the same quarter one year ago, falling from $277.00 million to -$29.00 million.

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CBL & Associates Properties

Dividend Yield: 5.20%

CBL & Associates Properties (NYSE: CBL) shares currently have a dividend yield of 5.20%.

CBL & Associates Properties, Inc. is a public real estate investment trust. It engages in acquisition, development, and management of properties. The fund invests in the real estate markets of United States. Its portfolio consists of enclosed malls and open-air centers. The company has a P/E ratio of 44.81.

The average volume for CBL & Associates Properties has been 2,110,800 shares per day over the past 30 days. CBL & Associates Properties has a market cap of $3.2 billion and is part of the real estate industry. Shares are up 4.8% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates CBL & Associates Properties as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, reasonable valuation levels and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself.

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 82.4% when compared to the same quarter one year prior, rising from $30.31 million to $55.29 million.
  • CBL & ASSOCIATES PPTYS INC 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, CBL & ASSOCIATES PPTYS INC reported lower earnings of $0.27 versus $0.59 in the prior year. This year, the market expects an improvement in earnings ($0.80 versus $0.27).
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, CBL & ASSOCIATES PPTYS INC's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for CBL & ASSOCIATES PPTYS INC is currently lower than what is desirable, coming in at 30.54%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 20.75% trails that of 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.

American Eagle Outfitters

Dividend Yield: 4.60%

American Eagle Outfitters (NYSE: AEO) shares currently have a dividend yield of 4.60%.

American Eagle Outfitters, Inc., together with its subsidiaries, operates as an apparel and accessories retailer in the United States and Canada. The company has a P/E ratio of 35.06.

The average volume for American Eagle Outfitters has been 5,592,400 shares per day over the past 30 days. American Eagle Outfitters has a market cap of $2.1 billion and is part of the retail industry. Shares are down 24.5% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates American Eagle Outfitters as a hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • AEO has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 1.00 is somewhat weak and could be cause for future problems.
  • AEO, with its decline in revenue, slightly underperformed the industry average of 3.4%. Since the same quarter one year prior, revenues slightly dropped by 4.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • AMERN EAGLE OUTFITTERS 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 two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, AMERN EAGLE OUTFITTERS INC reported lower earnings of $0.42 versus $1.31 in the prior year. This year, the market expects an improvement in earnings ($0.56 versus $0.42).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Specialty Retail industry and the overall market, AMERN EAGLE OUTFITTERS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for AMERN EAGLE OUTFITTERS INC is currently lower than what is desirable, coming in at 34.95%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.59% trails that of 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.

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