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Actionable news in ARLP: Alliance Resource Partners, L.P.,

What To Hold: 3 Hold-Rated Dividend Stocks ARLP, DKL, RWT

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."

Alliance Resource Partners Alliance Resource Partners (NASDAQ: ARLP) shares currently have a dividend yield of 18.40%. Alliance Resource Partners, L.P. produces and markets coal primarily to utilities and industrial users in the United States. It operates in two segments, Illinois Basin and Appalachia; and Other and Corporate. The company has a P/E ratio of 6.97. The average volume for Alliance Resource Partners has been 333,600 shares per day over the past 30 days. Alliance Resource Partners has a market cap of $1.1 billion and is part of the metals & mining industry. Shares are up 12.5% year-to-date as of the close of trading on Tuesday. 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 Alliance Resource Partners as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, poor profit margins and a generally disappointing performance in the stock itself. Highlights from the ratings report include:

  • Net operating cash flow has increased to $187.45 million or 22.66% when compared to the same quarter last year. In addition, ALLIANCE RESOURCE PTNRS -LP has also vastly surpassed the industry average cash flow growth rate of -38.88%.
  • Despite the weak revenue results, ARLP has outperformed against the industry average of 34.2%. Since the same quarter one year prior...