3 Hold-Rated Dividend Stocks: AVIV, NLY, CVRR

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."

Aviv REIT

Dividend Yield: 5.00%

Aviv REIT (NYSE: AVIV) shares currently have a dividend yield of 5.00%.

No company description available. The company has a P/E ratio of 35.47.

The average volume for Aviv REIT has been 324,600 shares per day over the past 30 days. Aviv REIT has a market cap of $1.4 billion and is part of the real estate industry. Shares are up 18.6% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Aviv REIT as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and notable return on equity. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 10.6%. Since the same quarter one year prior, revenues rose by 23.3%. 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.
  • Compared to its closing price of one year ago, AVIV's share price has jumped by 29.75%, 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.
  • AVIV REIT INC's earnings per share declined by 46.1% 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, AVIV REIT INC turned its bottom line around by earning $0.29 versus -$5.04 in the prior year. This year, the market expects an improvement in earnings ($0.86 versus $0.29).
  • The gross profit margin for AVIV REIT INC is rather high; currently it is at 50.79%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, AVIV's net profit margin of 15.65% is significantly lower than the industry average.
  • 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 31.8% when compared to the same quarter one year ago, falling from $9.92 million to $6.76 million.

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Annaly Capital Management

Dividend Yield: 10.20%

Annaly Capital Management (NYSE: NLY) shares currently have a dividend yield of 10.20%.

Annaly Capital Management, Inc. owns a portfolio of real estate related investments in the United States. The company has a P/E ratio of 19.00.

The average volume for Annaly Capital Management has been 7,051,800 shares per day over the past 30 days. Annaly Capital Management has a market cap of $11.2 billion and is part of the real estate industry. Shares are up 17.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Annaly Capital Management as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 141.26% to $1,576.85 million when compared to the same quarter last year. In addition, ANNALY CAPITAL MANAGEMENT has also vastly surpassed the industry average cash flow growth rate of 17.00%.
  • The gross profit margin for ANNALY CAPITAL MANAGEMENT is currently very high, coming in at 92.07%. Regardless of NLY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NLY's net profit margin of -50.97% significantly underperformed when compared to the industry average.
  • 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 120.5% when compared to the same quarter one year ago, falling from $1,638.21 million to -$335.51 million.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ANNALY CAPITAL MANAGEMENT's return on equity is below that of both the industry average and the S&P 500.

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CVR Refining

Dividend Yield: 16.20%

CVR Refining (NYSE: CVRR) shares currently have a dividend yield of 16.20%.

CVR Refining, LP operates as a petroleum refiner in the United States. The company has a P/E ratio of 8.34.

The average volume for CVR Refining has been 713,600 shares per day over the past 30 days. CVR Refining has a market cap of $3.5 billion and is part of the energy industry. Shares are up 3.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates CVR Refining as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 15.4%. 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 current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.49, which illustrates the ability to avoid short-term cash problems.
  • CVR REFINING LP's earnings per share declined by 47.0% 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, CVR REFINING LP increased its bottom line by earning $4.00 versus $2.53 in the prior year. This year, the market expects an improvement in earnings ($4.06 versus $4.00).
  • Net operating cash flow has decreased to $199.20 million or 12.50% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, CVR REFINING LP has marginally lower results.
  • 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 46.9% when compared to the same quarter one year ago, falling from $339.21 million to $180.00 million.

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