3 Hold-Rated Dividend Stocks: CYS, SNP, CBL

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."

CYS Investments

Dividend Yield: 13.70%

CYS Investments (NYSE: CYS) shares currently have a dividend yield of 13.70%.

CYS Investments, Inc., a specialty finance company, makes leveraged investments in whole-pool residential mortgage pass-through securities where the principal and interest payments are guaranteed. The company has a P/E ratio of 7.53.

The average volume for CYS Investments has been 2,056,100 shares per day over the past 30 days. CYS Investments has a market cap of $1.5 billion and is part of the real estate industry. Shares are up 26.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates CYS Investments as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and attractive valuation levels. However, as a counter to these strengths, we find that the company's revenue growth has not been good.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 140.94% and other important driving factors, this stock has surged by 35.51% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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 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 139.8% when compared to the same quarter one year prior, rising from -$398.29 million to $158.38 million.
  • CYS INVESTMENTS 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, CYS INVESTMENTS INC swung to a loss, reporting -$2.87 versus $2.75 in the prior year. This year, the market expects an improvement in earnings ($1.35 versus -$2.87).
  • CYS, with its decline in revenue, underperformed when compared the industry average of 10.3%. Since the same quarter one year prior, revenues fell by 11.7%. The declining revenue has not hurt the company's bottom line, with increasing 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, CYS INVESTMENTS INC's return on equity is below that of both the industry average and the S&P 500.

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China Petroleum & Chemical

Dividend Yield: 4.20%

China Petroleum & Chemical (NYSE: SNP) shares currently have a dividend yield of 4.20%.

China Petroleum & Chemical Corporation, an energy and chemical company, through its subsidiaries, is engaged in the oil and gas, and chemical operations in the People's Republic of China. The company has a P/E ratio of 20.99.

The average volume for China Petroleum & Chemical has been 127,300 shares per day over the past 30 days. China Petroleum & Chemical has a market cap of $120.1 billion and is part of the energy industry. Shares are up 26.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates China Petroleum & Chemical as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and good cash flow from operations. 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:
  • Powered by its strong earnings growth of 50.87% and other important driving factors, this stock has surged by 34.43% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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 company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 32.3% when compared to the same quarter one year prior, rising from $2,248.69 million to $2,974.25 million.
  • Net operating cash flow has significantly increased by 81.34% to $7,353.63 million when compared to the same quarter last year. In addition, CHINA PETROLEUM & CHEM CORP has also vastly surpassed the industry average cash flow growth rate of -5.78%.
  • CHINA PETROLEUM & CHEM CORP 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, CHINA PETROLEUM & CHEM CORP reported lower earnings of $8.47 versus $8.73 in the prior year. This year, the market expects an improvement in earnings ($9.65 versus $8.47).

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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 31.98.

The average volume for CBL & Associates Properties has been 998,100 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 5.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates CBL & Associates Properties as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and reasonable valuation levels. 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 Real Estate Investment Trusts (REITs) industry. The net income increased by 223.8% when compared to the same quarter one year prior, rising from $11.72 million to $37.96 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.3%. Since the same quarter one year prior, revenues slightly increased by 1.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 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. 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.
  • In its most recent trading session, CBL has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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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