What To Hold: 3 Hold-Rated Dividend Stocks AMID, MITT, HCAP

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."

American Midstream Partners

Dividend Yield: 7.10%

American Midstream Partners (NYSE: AMID) shares currently have a dividend yield of 7.10%.

American Midstream Partners, LP is engaged in gathering, treating, processing, and transporting natural gas primarily in the Gulf Coast and Southeast regions of the United States.

The average volume for American Midstream Partners has been 39,700 shares per day over the past 30 days. American Midstream Partners has a market cap of $297.6 million and is part of the energy industry. Shares are down 5.3% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates American Midstream Partners as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • AMID's revenue growth has slightly outpaced the industry average of 1.9%. Since the same quarter one year prior, revenues slightly increased by 0.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • AMERICAN MIDSTREAM PRTNRS LP 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, AMERICAN MIDSTREAM PRTNRS LP reported poor results of -$6.84 versus -$0.73 in the prior year. This year, the market expects an improvement in earnings (-$0.68 versus -$6.84).
  • The gross profit margin for AMERICAN MIDSTREAM PRTNRS LP is currently extremely low, coming in at 8.68%. Regardless of AMID's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -2.14% trails the industry average.
  • Net operating cash flow has decreased to $8.86 million or 16.09% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, AMERICAN MIDSTREAM PRTNRS LP has marginally lower results.

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AG Mortgage Investment

Dividend Yield: 12.60%

AG Mortgage Investment (NYSE: MITT) shares currently have a dividend yield of 12.60%.

AG Mortgage Investment Trust, Inc., a real estate investment trust, focuses on investing, acquiring, and managing a portfolio of residential mortgage assets, other real estate-related securities, and financial assets. The company has a P/E ratio of 6.55.

The average volume for AG Mortgage Investment has been 230,300 shares per day over the past 30 days. AG Mortgage Investment has a market cap of $540.7 million and is part of the real estate industry. Shares are up 22.6% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates AG Mortgage Investment as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and attractive valuation levels. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:
  • MITT's very impressive revenue growth greatly exceeded the industry average of 9.1%. Since the same quarter one year prior, revenues leaped by 214.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • AG MORTGAGE INVESTMENT TRUST 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, AG MORTGAGE INVESTMENT TRUST swung to a loss, reporting -$1.60 versus $7.34 in the prior year. This year, the market expects an improvement in earnings ($2.44 versus -$1.60).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, AG MORTGAGE INVESTMENT TRUST's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $25.56 million or 38.84% when compared to the same quarter last year. Despite a decrease in cash flow AG MORTGAGE INVESTMENT TRUST is still fairing well by exceeding its industry average cash flow growth rate of -64.23%.

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

Harvest Capital Credit

Dividend Yield: 10.60%

Harvest Capital Credit (NASDAQ: HCAP) shares currently have a dividend yield of 10.60%.

Harvest Capital Credit LLC is a business development company providing structured credit to small businesses. The company has a P/E ratio of 16.60.

The average volume for Harvest Capital Credit has been 19,800 shares per day over the past 30 days. Harvest Capital Credit has a market cap of $79.2 million and is part of the financial services industry. Shares are down 15.3% year-to-date as of the close of trading on Wednesday.

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 Harvest Capital Credit as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. 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:
  • HCAP's very impressive revenue growth greatly exceeded the industry average of 5.1%. Since the same quarter one year prior, revenues leaped by 70.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • HARVEST CAPITAL CREDIT CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.36 versus $0.47).
  • The gross profit margin for HARVEST CAPITAL CREDIT CORP is rather high; currently it is at 57.09%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, HCAP's net profit margin of 68.01% significantly outperformed against the industry.
  • HCAP has underperformed the S&P 500 Index, declining 15.36% from its price level of one year ago.
  • When compared to other companies in the Capital Markets industry and the overall market, HARVEST CAPITAL CREDIT CORP's return on equity is below that of both the industry average and the S&P 500.

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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