3 Hold-Rated Dividend Stocks: OFC, WDC, RDS.B

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." Corporate Office Properties Dividend Yield: 4.30% Corporate Office Properties (NYSE: OFC) shares currently have a dividend yield of 4.30%. Corporate Office Properties Trust, a real estate investment trust (REIT), engages in the acquisition, development, ownership, management, and leasing of suburban office properties. The company has a P/E ratio of 14.51. The average volume for Corporate Office Properties has been 702,400 shares per day over the past 30 days. Corporate Office Properties has a market cap of $2.4 billion and is part of the real estate industry. Shares are up 20.6% year-to-date as of the close of trading on Monday. EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE. TheStreet Ratings rates Corporate Office Properties as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and feeble growth in the company's earnings per share. Highlights from the ratings report include:

  • OFC, with its decline in revenue, underperformed when compared the industry average of 5.2%. Since the same quarter one year prior, revenues fell by 10.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for CORP OFFICE PPTYS TR INC is currently lower than what is desirable, coming in at 31.57%. Regardless of OFC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, OFC's net profit margin of 4.69% is significantly lower than 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 48.9% when compared to the same quarter one year ago, falling from $13.36 million to $6.83 million.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Western Digital Dividend Yield: 4.90% Western Digital (NASDAQ: WDC) shares currently have a dividend yield of 4.90%. Western Digital Corporation, together with its subsidiaries, engages in the development, manufacture, sale, and provision of data storage solutions that enable consumers, businesses, governments, and other organizations to create, manage, experience, and preserve digital content worldwide. The company has a P/E ratio of 8.41. The average volume for Western Digital has been 5,783,700 shares per day over the past 30 days. Western Digital has a market cap of $9.5 billion and is part of the computer hardware industry. Shares are down 32% year-to-date as of the close of trading on Monday. EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE. TheStreet Ratings rates Western Digital as a hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. 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:

  • WDC'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. Along with this, the company maintains a quick ratio of 2.62, which clearly demonstrates the ability to cover short-term cash needs.
  • WDC, with its decline in revenue, slightly underperformed the industry average of 13.0%. Since the same quarter one year prior, revenues fell by 20.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $485.00 million or 29.09% when compared to the same quarter last year. Despite a decrease in cash flow WESTERN DIGITAL CORP is still fairing well by exceeding its industry average cash flow growth rate of -39.38%.
  • WESTERN DIGITAL 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, WESTERN DIGITAL CORP reported lower earnings of $6.17 versus $6.69 in the prior year. For the next year, the market is expecting a contraction of 6.9% in earnings ($5.75 versus $6.17).
  • 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 Computers & Peripherals industry. The net income has significantly decreased by 80.7% when compared to the same quarter one year ago, falling from $384.00 million to $74.00 million.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Royal Dutch Shell Dividend Yield: 7.00% Royal Dutch Shell (NYSE: RDS.B) shares currently have a dividend yield of 7.00%. Royal Dutch Shell plc operates as an independent oil and gas company worldwide. It operates through Upstream and Downstream segments. The company explores for and extracts crude oil, natural gas, and natural gas liquids. The company has a P/E ratio of 6.75. The average volume for Royal Dutch Shell has been 2,741,800 shares per day over the past 30 days. Royal Dutch Shell has a market cap of $170.7 billion and is part of the energy industry. Shares are up 16.2% year-to-date as of the close of trading on Monday. EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE. TheStreet Ratings rates Royal Dutch Shell as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, growth in earnings per share 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, weak operating cash flow and disappointing return on equity. Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 57.8% when compared to the same quarter one year prior, rising from $595.00 million to $939.00 million.
  • ROYAL DUTCH SHELL PLC 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, ROYAL DUTCH SHELL PLC reported lower earnings of $0.60 versus $4.70 in the prior year. This year, the market expects an improvement in earnings ($4.54 versus $0.60).
  • Net operating cash flow has decreased to $5,423.00 million or 43.55% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ROYAL DUTCH SHELL PLC has marginally lower results.
  • RDS.B has underperformed the S&P 500 Index, declining 16.57% 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.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE. Other helpful dividend tools from TheStreet:

More from Markets

Stocks Close Lower But Trim Losses With Late Rebound

Stocks Close Lower But Trim Losses With Late Rebound

China Set to 'Weaponize' Yuan to Fight Trump's Trade War: Report

China Set to 'Weaponize' Yuan to Fight Trump's Trade War: Report

Jim Cramer on Canopy Growth's New $4 Billion Stake From Constellation Brands

Jim Cramer on Canopy Growth's New $4 Billion Stake From Constellation Brands

Jim Cramer on the Market Selloff, Macy's, Constellation Brands and Canopy Growth

Jim Cramer on the Market Selloff, Macy's, Constellation Brands and Canopy Growth

Jim Cramer Breaks Down the Decline in Macy's Stock Even With a Strong Quarter

Jim Cramer Breaks Down the Decline in Macy's Stock Even With a Strong Quarter