3 Hold-Rated Dividend Stocks: EQY, SRC, NTI

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."

Equity One

Dividend Yield: 4.10%

Equity One (NYSE: EQY) shares currently have a dividend yield of 4.10%.

Equity One, Inc is a real estate investment trust. The firm invests in the real estate markets of United States. It owns, manages, acquires, develops and redevelops shopping centers and retail properties. The company has a P/E ratio of 65.00.

The average volume for Equity One has been 577,500 shares per day over the past 30 days. Equity One has a market cap of $2.6 billion and is part of the real estate industry. Shares are down 3.5% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Equity One as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.6%. Since the same quarter one year prior, revenues slightly increased by 4.7%. 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.
  • EQUITY ONE 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. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EQUITY ONE INC turned its bottom line around by earning $0.31 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings ($0.39 versus $0.31).
  • The gross profit margin for EQUITY ONE INC is rather low; currently it is at 17.69%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -2.71% is significantly below that of 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 107.2% when compared to the same quarter one year ago, falling from $33.41 million to -$2.41 million.

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Spirit Realty Capital

Dividend Yield: 6.10%

Spirit Realty Capital (NYSE: SRC) shares currently have a dividend yield of 6.10%.

Spirit Realty Capital, Inc is a publicly traded real estate investment trust.

The average volume for Spirit Realty Capital has been 3,257,100 shares per day over the past 30 days. Spirit Realty Capital has a market cap of $4.4 billion and is part of the real estate industry. Shares are up 11.8% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Spirit Realty Capital 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 also find weaknesses including unimpressive growth in net income and poor profit margins.

Highlights from the ratings report include:
  • SRC's very impressive revenue growth greatly exceeded the industry average of 11.6%. Since the same quarter one year prior, revenues leaped by 109.6%. 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 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.
  • The gross profit margin for SPIRIT REALTY CAPITAL INC is currently lower than what is desirable, coming in at 29.61%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -59.17% is significantly below that of 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 669.7% when compared to the same quarter one year ago, falling from -$11.67 million to -$89.82 million.

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

Northern Tier Energy LP Class A

Dividend Yield: 9.40%

Northern Tier Energy LP Class A (NYSE: NTI) shares currently have a dividend yield of 9.40%.

Northern Tier Energy LP, an independent downstream energy company, is engaged in refining, retail, and pipeline operations in the United States. It operates through two segments, Refining and Retail. The company has a P/E ratio of 11.81.

The average volume for Northern Tier Energy LP Class A has been 457,100 shares per day over the past 30 days. Northern Tier Energy LP Class A has a market cap of $2.1 billion and is part of the energy industry. Shares are down 7.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Northern Tier Energy LP Class A as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels 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, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 3.0%. Since the same quarter one year prior, revenues rose by 41.4%. 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 debt-to-equity ratio is somewhat low, currently at 0.66, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
  • The gross profit margin for NORTHERN TIER ENERGY LP is currently extremely low, coming in at 6.95%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.86% trails that of the industry average.
  • Net operating cash flow has decreased to $62.80 million or 23.97% 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.

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