3 Buy-Rated Dividend Stocks Leading The Pack: CTL, MO, SFUN
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: 6.20%
(NYSE:
) shares currently have a dividend yield of 6.20%.
CenturyLink, Inc. provides various communications services to residential, business, governmental, and wholesale customers in the United States. It operates through two segments, Business and Consumer. The company has a P/E ratio of 25.82.
The average volume for CenturyLink has been 4,292,200 shares per day over the past 30 days. CenturyLink has a market cap of $19.9 billion and is part of the telecommunications industry. Shares are down 11.9% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
CenturyLink
as a
. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins, notable return on equity and solid stock price performance. 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:
- Net operating cash flow has slightly increased to $1,251.00 million or 8.68% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -27.23%.
- The gross profit margin for CENTURYLINK INC is rather high; currently it is at 56.38%. Regardless of CTL's high profit margin, it has managed to decrease from the same period last year.
- CENTURYLINK INC's earnings per share declined by 19.5% 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, CENTURYLINK INC turned its bottom line around by earning $1.35 versus -$0.43 in the prior year. This year, the market expects an improvement in earnings ($2.56 versus $1.35).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.0%. Since the same quarter one year prior, revenues slightly dropped by 2.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The change in net income from the same quarter one year ago has significantly exceeded that of the Diversified Telecommunication Services industry average, but is less than that of the S&P 500. The net income has decreased by 21.3% when compared to the same quarter one year ago, dropping from $239.00 million to $188.00 million.
- You can view the full CenturyLink Ratings Report.
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Dividend Yield: 4.10%
(NYSE:
) shares currently have a dividend yield of 4.10%.
Altria Group, Inc., through its subsidiaries, manufactures and sells cigarettes, smokeless products, and wine in the United States and internationally. The company has a P/E ratio of 20.05.
The average volume for Altria Group has been 6,646,900 shares per day over the past 30 days. Altria Group has a market cap of $101.1 billion and is part of the tobacco industry. Shares are up 4.1% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
Altria Group
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and solid stock price performance. 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 23.1%. Since the same quarter one year prior, revenues slightly increased by 4.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 162.50% and other important driving factors, this stock has surged by 43.91% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- ALTRIA GROUP 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. We feel that this trend should continue. During the past fiscal year, ALTRIA GROUP INC increased its bottom line by earning $2.57 versus $2.26 in the prior year. This year, the market expects an improvement in earnings ($2.80 versus $2.57).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Tobacco industry. The net income increased by 153.3% when compared to the same quarter one year prior, rising from $488.00 million to $1,236.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Tobacco industry and the overall market, ALTRIA GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full Altria Group Ratings Report.
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Dividend Yield: 7.30%
(NYSE:
) shares currently have a dividend yield of 7.30%.
SouFun Holdings Limited operates a real estate Internet portal, and a home furnishing and an improvement Website in the People's Republic of China. The company has a P/E ratio of 1.71.
The average volume for SouFun Holdings has been 6,793,800 shares per day over the past 30 days. SouFun Holdings has a market cap of $2.3 billion and is part of the internet industry. Shares are down 23.3% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
SouFun Holdings
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
Highlights from the ratings report include:
- SFUN's revenue growth trails the industry average of 18.6%. Since the same quarter one year prior, revenues slightly increased by 2.7%. 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 SOUFUN HLDGS LTD is currently very high, coming in at 82.22%. Regardless of SFUN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SFUN's net profit margin of 37.00% significantly outperformed against the industry.
- SFUN's debt-to-equity ratio of 0.92 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 SFUN's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.20 is high and demonstrates strong liquidity.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, SOUFUN HLDGS LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full SouFun Holdings Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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