3 Hold-Rated Dividend Stocks: GHL, RRD, CM

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."

Greenhill

Dividend Yield: 4.10%

Greenhill (NYSE: GHL) shares currently have a dividend yield of 4.10%.

Greenhill & Co., Inc., together with its subsidiaries, operates as an independent investment bank for corporations, partnerships, institutions, and governments worldwide. The company provides financial advice on mergers, acquisitions, restructurings, financings, and capital raising. The company has a P/E ratio of 39.77.

The average volume for Greenhill has been 490,500 shares per day over the past 30 days. Greenhill has a market cap of $1.2 billion and is part of the financial services industry. Shares are down 23.9% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Greenhill as a hold. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and premium valuation.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $22.38 million or 38.29% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 15.20%.
  • The revenue fell significantly faster than the industry average of 5.1%. Since the same quarter one year prior, revenues fell by 45.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • GREENHILL & CO 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, GREENHILL & CO INC increased its bottom line by earning $1.56 versus $1.38 in the prior year. For the next year, the market is expecting a contraction of 1.9% in earnings ($1.53 versus $1.56).
  • 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 Capital Markets industry. The net income has significantly decreased by 98.3% when compared to the same quarter one year ago, falling from $13.62 million to $0.24 million.
  • The share price of GREENHILL & CO INC has not done very well: it is down 7.85% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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

RR Donnelley & Sons

Dividend Yield: 6.50%

RR Donnelley & Sons (NASDAQ: RRD) shares currently have a dividend yield of 6.50%.

R.R. Donnelley & Sons Company provides integrated communication solutions to private and public sectors worldwide. It operates through Publishing and Retail Services, Variable Print, Strategic Services, and International segments. The company has a P/E ratio of 18.76.

The average volume for RR Donnelley & Sons has been 2,159,800 shares per day over the past 30 days. RR Donnelley & Sons has a market cap of $3.2 billion and is part of the diversified services industry. Shares are down 21.8% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates RR Donnelley & Sons as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and generally higher debt management risk.

Highlights from the ratings report include:
  • RRD's revenue growth has slightly outpaced the industry average of 4.4%. Since the same quarter one year prior, revenues slightly increased by 5.3%. 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 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 Commercial Services & Supplies industry and the overall market, DONNELLEY (R R) & SONS CO's return on equity exceeds that of both the industry average and 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. 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.
  • 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 Commercial Services & Supplies industry. The net income has significantly decreased by 207.0% when compared to the same quarter one year ago, falling from $27.10 million to -$29.00 million.
  • The gross profit margin for DONNELLEY (R R) & SONS CO is rather low; currently it is at 21.89%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.08% 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.

Canadian Imperial Bank of Commerce

Dividend Yield: 4.10%

Canadian Imperial Bank of Commerce (NYSE: CM) shares currently have a dividend yield of 4.10%.

Canadian Imperial Bank of Commerce, a diversified financial institution, provides various financial products and services to individuals, small businesses, and commercial, corporate, and institutional clients in Canada and internationally. The company has a P/E ratio of 12.78.

The average volume for Canadian Imperial Bank of Commerce has been 145,000 shares per day over the past 30 days. Canadian Imperial Bank of Commerce has a market cap of $36.5 billion and is part of the banking industry. Shares are up 6.5% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Canadian Imperial Bank of Commerce as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and weak operating cash flow.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, CM's share price has jumped by 29.84%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The gross profit margin for CANADIAN IMPERIAL BANK is currently very high, coming in at 72.28%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CM's net profit margin of 7.76% significantly trails the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 2.6%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. 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 Commercial Banks industry. The net income has significantly decreased by 63.1% when compared to the same quarter one year ago, falling from $860.00 million to $317.00 million.
  • Net operating cash flow has significantly decreased to -$2,201.00 million or 1036.59% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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

Week Ahead: Trade Fears and Stress Tests Signal More Volatility To Come

Week Ahead: Trade Fears and Stress Tests Signal More Volatility To Come

Trump Takes Aim at Auto Imports; Markets End Mixed -- ICYMI

Trump Takes Aim at Auto Imports; Markets End Mixed -- ICYMI

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

Flashback Friday: The Market Movers

Flashback Friday: The Market Movers