What To Hold: 3 Hold-Rated Dividend Stocks TCAP, FISH, SXCP

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

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."

Triangle Capital Corporation

Dividend Yield: 9.10%

Triangle Capital Corporation (NYSE: TCAP) shares currently have a dividend yield of 9.10%.

Triangle Capital Corporation is a business development company specializing in private equity and mezzanine investments. The company has a P/E ratio of 11.83.

The average volume for Triangle Capital Corporation has been 156,700 shares per day over the past 30 days. Triangle Capital Corporation has a market cap of $790.1 million and is part of the financial services industry. Shares are up 18% year-to-date as of the close of trading on Thursday.

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

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 5.2%. Since the same quarter one year prior, revenues rose by 39.4%. 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 gross profit margin for TRIANGLE CAPITAL CORP is currently very high, coming in at 77.31%. Regardless of TCAP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TCAP's net profit margin of 1.55% is significantly lower than the industry average.
  • TRIANGLE CAPITAL CORP 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TRIANGLE CAPITAL CORP reported lower earnings of $1.04 versus $2.94 in the prior year. This year, the market expects an improvement in earnings ($2.12 versus $1.04).
  • Net operating cash flow has significantly decreased to -$39.08 million or 218.36% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of TRIANGLE CAPITAL CORP has not done very well: it is down 8.08% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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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Marlin Midstream Partners

Dividend Yield: 8.90%

Marlin Midstream Partners (NASDAQ: FISH) shares currently have a dividend yield of 8.90%.

Marlin Midstream Partners, LP, together with its subsidiaries, acquires, owns, develops, and operates midstream energy assets in the United States. The company operates through two segments, Midstream Natural Gas and Crude Oil Logistics. The company has a P/E ratio of 13.50.

The average volume for Marlin Midstream Partners has been 76,000 shares per day over the past 30 days. Marlin Midstream Partners has a market cap of $152.6 million and is part of the energy industry. Shares are down 8.2% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Marlin Midstream Partners as a hold. The company's strongest point has been its expanding profit margins. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself and unimpressive growth in net income.

Highlights from the ratings report include:
  • MARLIN MIDSTREAM 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. 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, MARLIN MIDSTREAM PARTNERS LP increased its bottom line by earning $1.22 versus $0.36 in the prior year. This year, the market expects an improvement in earnings ($1.36 versus $1.22).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 38.3%. Since the same quarter one year prior, revenues fell by 31.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for MARLIN MIDSTREAM PARTNERS LP is currently lower than what is desirable, coming in at 28.94%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -9.89% 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 124.7% when compared to the same quarter one year ago, falling from $5.13 million to -$1.27 million.
  • The share price of MARLIN MIDSTREAM PARTNERS LP has not done very well: it is down 8.26% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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SunCoke Energy Partners

Dividend Yield: 10.80%

SunCoke Energy Partners (NYSE: SXCP) shares currently have a dividend yield of 10.80%.

SunCoke Energy Partners, L.P., a master limited partnership, manufactures and sells coke used in the blast furnace production of steel in the United States. The company operates through Domestic Coke and Coke Logistics segments. The company has a P/E ratio of 14.45.

The average volume for SunCoke Energy Partners has been 160,500 shares per day over the past 30 days. SunCoke Energy Partners has a market cap of $497.4 million and is part of the metals & mining industry. Shares are down 21.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates SunCoke Energy Partners as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 103.42% to $29.70 million when compared to the same quarter last year. In addition, SUNCOKE ENERGY PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of 31.87%.
  • SXCP's debt-to-equity ratio of 0.96 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that SXCP's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.60 is high and demonstrates strong liquidity.
  • Despite the weak revenue results, SXCP has outperformed against the industry average of 17.6%. Since the same quarter one year prior, revenues slightly dropped by 5.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Metals & Mining industry and the overall market on the basis of return on equity, SUNCOKE ENERGY PARTNERS LP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 25.25%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 29.26% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

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