What To Hold: 3 Hold-Rated Dividend Stocks TICC, VLCCF, CRT

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."

TICC Capital

Dividend Yield: 13.60%

TICC Capital (NASDAQ: TICC) shares currently have a dividend yield of 13.60%.

TICC Capital Corp., a business development company, operates as a closed-end, non-diversified management investment company. The firm invests in both public and private companies. The company has a P/E ratio of 12.70.

The average volume for TICC Capital has been 441,000 shares per day over the past 30 days. TICC Capital has a market cap of $512.9 million and is part of the financial services industry. Shares are down 17.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates TICC Capital as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.1%. Since the same quarter one year prior, revenues rose by 17.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 801.6% when compared to the same quarter one year prior, rising from $1.46 million to $13.14 million.
  • TICC CAPITAL 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, TICC CAPITAL CORP reported lower earnings of $1.11 versus $1.77 in the prior year. This year, the market expects an improvement in earnings ($1.13 versus $1.11).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, TICC CAPITAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Net operating cash flow has decreased to -$35.97 million or 14.64% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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Knightsbridge Shipping

Dividend Yield: 11.00%

Knightsbridge Shipping (NASDAQ: VLCCF) shares currently have a dividend yield of 11.00%.

Knightsbridge Shipping Limited, a shipping company, engages in the seaborne transportation of dry bulk cargoes worldwide. As of October 7, 2014, it owned and operated a fleet of 27 Capesize dry bulk carriers. The company has a P/E ratio of 51.79.

The average volume for Knightsbridge Shipping has been 915,900 shares per day over the past 30 days. Knightsbridge Shipping has a market cap of $580.9 million and is part of the transportation industry. Shares are down 19.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Knightsbridge Shipping as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • VLCCF's very impressive revenue growth greatly exceeded the industry average of 20.8%. Since the same quarter one year prior, revenues leaped by 168.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • VLCCF's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • KNIGHTSBRIDGE SHIPPING LTD 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, KNIGHTSBRIDGE SHIPPING LTD reported lower earnings of $0.11 versus $0.25 in the prior year. This year, the market expects an improvement in earnings ($0.16 versus $0.11).
  • 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 Marine industry and the overall market on the basis of return on equity, KNIGHTSBRIDGE SHIPPING LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.

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Cross Timbers Royalty

Dividend Yield: 8.30%

Cross Timbers Royalty (NYSE: CRT) shares currently have a dividend yield of 8.30%.

Cross Timbers Royalty Trust operates as an express trust in the United States. The company's function is to collect and distribute monthly net profits income from royalty interests and overriding royalty interests to unit holders. The company has a P/E ratio of 10.18.

The average volume for Cross Timbers Royalty has been 26,400 shares per day over the past 30 days. Cross Timbers Royalty has a market cap of $164.3 million and is part of the energy industry. Shares are down 6.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Cross Timbers Royalty as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. 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 revenue growth came in higher than the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 19.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CRT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 12.31, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 21.6% when compared to the same quarter one year prior, going from $3.10 million to $3.77 million.
  • CROSS TIMBERS ROYALTY TRUST has improved earnings per share by 21.1% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CROSS TIMBERS ROYALTY TRUST reported lower earnings of $2.31 versus $2.48 in the prior year.
  • CRT has underperformed the S&P 500 Index, declining 11.05% from its price level of one year ago. 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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