What To Hold: 3 Hold-Rated Dividend Stocks CPG, UAN, MCEP

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."

Crescent Point Energy

Dividend Yield: 7.60%

Crescent Point Energy (NYSE: CPG) shares currently have a dividend yield of 7.60%.

Crescent Point Energy Corp. is engaged in the acquisition, exploration, development, and production of oil and natural gas properties in Western Canada and the United States. The company has a P/E ratio of 67.85.

The average volume for Crescent Point Energy has been 114,700 shares per day over the past 30 days. Crescent Point Energy has a market cap of $13.7 billion and is part of the energy industry. Shares are unchanged year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Crescent Point Energy as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and good cash flow from operations. 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:
  • CPG's revenue growth has slightly outpaced the industry average of 1.9%. Since the same quarter one year prior, revenues slightly increased by 7.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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 36.3% when compared to the same quarter one year prior, rising from $72.33 million to $98.59 million.
  • CPG's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.41 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CRESCENT POINT ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • CPG has underperformed the S&P 500 Index, declining 14.99% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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CVR Partners

Dividend Yield: 11.10%

CVR Partners (NYSE: UAN) shares currently have a dividend yield of 11.10%.

CVR Partners, LP is engaged in the production, distribution, and marketing of nitrogen fertilizers in the United States. Its nitrogen fertilizer products include ammonia and urea ammonium nitrate (UAN). The company has a P/E ratio of 11.01.

The average volume for CVR Partners has been 256,600 shares per day over the past 30 days. CVR Partners has a market cap of $869.3 million and is part of the chemicals industry. Shares are down 26% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates CVR Partners as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, 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 a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • UAN's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.93, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has increased to $24.35 million or 42.10% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 4.16%.
  • 39.97% is the gross profit margin for CVR PARTNERS LP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, UAN's net profit margin of 22.18% significantly outperformed against the industry.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Chemicals industry and the overall market on the basis of return on equity, CVR PARTNERS LP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • 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 Chemicals industry. The net income has significantly decreased by 51.7% when compared to the same quarter one year ago, falling from $35.44 million to $17.13 million.

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

Mid-Con Energy Partners

Dividend Yield: 11.20%

Mid-Con Energy Partners (NASDAQ: MCEP) shares currently have a dividend yield of 11.20%.

Mid-Con Energy Partners, LP is engaged in the acquisition, exploitation, development, and production of oil and natural gas properties in North America. The company has a P/E ratio of 19.37.

The average volume for Mid-Con Energy Partners has been 110,000 shares per day over the past 30 days. Mid-Con Energy Partners has a market cap of $388.8 million and is part of the energy industry. Shares are down 14.8% year-to-date as of the close of trading on Friday.

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

TheStreet Ratings rates Mid-Con Energy Partners as a hold. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • The gross profit margin for MID-CON ENERGY PARTNERS -LP is rather high; currently it is at 58.40%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, MCEP's net profit margin of 19.78% significantly outperformed against the industry.
  • MCEP, with its decline in revenue, underperformed when compared the industry average of 1.9%. Since the same quarter one year prior, revenues fell by 14.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, MID-CON ENERGY PARTNERS -LP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • MID-CON ENERGY PARTNERS -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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, MID-CON ENERGY PARTNERS -LP reported lower earnings of $1.44 versus $1.63 in the prior year. For the next year, the market is expecting a contraction of 18.1% in earnings ($1.18 versus $1.44).
  • 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 63.5% when compared to the same quarter one year ago, falling from $10.54 million to $3.85 million.

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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