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TheStreet Open House

10 A-Rated Mid-Cap Dividend Stocks

Stocks in this article: WR UBA NHI ARLP HE SXL OKS

NEW YORK ( TheStreet) - The 10 highest-yielding mid-cap stocks rated A-minus or higher by TheStreet Ratings are trading at high levels with neutral analyst sentiment, but have growing revenue and feature attractive dividend yields.

Starting with companies with market capitalizations between $1 billion and $5 billion rated A-minus (strong buy) or higher -- and five stars for dividend income by TheStreet Ratings -- we pared down the group to the 10 stocks with the highest forward dividend yields based on the most recent quarterly payout.

Just like our 10 A-Rated Large-Cap Dividend Stocks, energy names dominate the list, with limited partnerships being featured. Total returns assume reinvested dividends or LP income distributions, although that might not be the best approach when playing energy LPs.

10. Westar Energy

Company Profile

Shares of Westar Energy (WR - Get Report) of Topeka, Kan. is an electric utility company operating throughout most of Kansas. Shares closed at $24.08 Friday, for a year-to-date total return of 16%. Based on a quarterly payout of 31 cents, the forward dividend yield on the shares is 5.15%.

Income Statement

Westar reported second-quarter net income attributed to common stock of $53.1 million, or 47 cents a share, increasing from $30.4 million, or 27 cents a share, during the first quarter and $38.1 million, or 35 cents a share, for the second quarter of 2009.

Second-quarter total revenue was $495.2 million, increasing 6% year-over-year as retail sales increased and total operating expenses declined slightly. This was because of accounting changes and a lowering of environmental remediation costs associated with assets the company previously sold.

Balance Sheet

Westar Energy's ratio of debt to capital is 0.57. For most utility companies this ratio is high when compared to many other industries because of the need for continual capital investment. The company said in its 2009 10-K filing with the Securities and Exchange Commission that "anticipated capital expenditures for 2010 through 2012 are approximately $2.4 billion."

Stock Ratios

Shares trade for 15.2 times earnings, which exceeds similarly-sized electric utilities (by market capitalization) including DPL Inc. (DPL) which trades for 11.8 times earnings and NV Energy (NVE), which has a P/E of 13.6. On the other hand, ITC Holdings (ITC) has a P/E of 21.6.

Analyst Ratings

Out of nine analysts covering Westar Energy, three rate the shares a buy, while six recommend investors hold the shares. With the stock returning 31% over the past 52 weeks, it's not surprising to see the shares close to the median 12-month target of $24.13 among analysts polled by Thomson Reuters, although TheStreet Ratings has a target price of $30.02.

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