3 Buy-Rated Dividend Stocks: EDR, DFT, ETP
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 "Buy."
Dividend Yield: 4.20%
(NYSE:
) shares currently have a dividend yield of 4.20%.
EdR is a real estate investment trust. The firm invests in the real estate markets of United States. It invests collegiate housing communities. The firm develops, acquires, owns, and manages collegiate housing communities located near university campuses. The company has a P/E ratio of 31.38.
The average volume for Education Realty has been 584,200 shares per day over the past 30 days. Education Realty has a market cap of $1.6 billion and is part of the real estate industry. Shares are down 4.8% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
Education Realty
as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, compelling growth in net income, reasonable valuation levels and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 9.9%. Since the same quarter one year prior, revenues rose by 20.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 1262.3% when compared to the same quarter one year prior, rising from $1.64 million to $22.40 million.
- EDUCATION REALTY TRUST INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, EDUCATION REALTY TRUST INC increased its bottom line by earning $0.98 versus $0.15 in the prior year. For the next year, the market is expecting a contraction of 73.5% in earnings ($0.26 versus $0.98).
- You can view the full Education Realty Ratings Report.
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Dividend Yield: 5.30%
(NYSE:
) shares currently have a dividend yield of 5.30%.
DuPont Fabros Technology, Inc., a real estate investment trust (REIT), engages in the ownership, acquisition, development, operation, management, and lease of large-scale data center facilities in the United States. The company has a P/E ratio of 26.71.
The average volume for Dupont Fabros Technology has been 871,500 shares per day over the past 30 days. Dupont Fabros Technology has a market cap of $2.1 billion and is part of the real estate industry. Shares are down 2.5% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
Dupont Fabros Technology
as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, revenue growth, reasonable valuation levels and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
Highlights from the ratings report include:
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 38.7% when compared to the same quarter one year prior, rising from $18.27 million to $25.35 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.9%. Since the same quarter one year prior, revenues slightly increased by 8.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has increased to $72.70 million or 36.88% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 8.19%.
- You can view the full Dupont Fabros Technology Ratings Report.
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Dividend Yield: 7.30%
(NYSE:
) shares currently have a dividend yield of 7.30%.
Energy Transfer Partners, L.P. is engaged in the natural gas midstream, and intrastate transportation and storage businesses in the United States. The company has a P/E ratio of 34.65.
The average volume for Energy Transfer Partners has been 1,494,300 shares per day over the past 30 days. Energy Transfer Partners has a market cap of $19.6 billion and is part of the energy industry. Shares are down 15.8% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
Energy Transfer Partners
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 19.8%. Since the same quarter one year prior, revenues slightly increased by 2.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ENERGY TRANSFER PARTNERS -LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, ENERGY TRANSFER PARTNERS -LP turned its bottom line around by earning $1.65 versus -$0.24 in the prior year. This year, the market expects an improvement in earnings ($2.67 versus $1.65).
- 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 120.0% when compared to the same quarter one year prior, rising from -$541.00 million to $108.00 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ENERGY TRANSFER PARTNERS -LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- In its most recent trading session, ETP has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Energy Transfer Partners Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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