3 Buy-Rated Dividend Stocks Leading The Pack: EDR, HEES, LPT
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: 4.10%
(NYSE:
) shares currently have a dividend yield of 4.10%.
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 32.42.
The average volume for Education Realty has been 553,200 shares per day over the past 30 days. Education Realty has a market cap of $1.7 billion and is part of the real estate industry. Shares are down 4.4% 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, reasonable valuation levels, good cash flow from operations and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- EDR's revenue growth has slightly outpaced the industry average of 10.1%. 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.
- Net operating cash flow has increased to $17.94 million or 29.71% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 11.97%.
- You can view the full Education Realty Ratings Report.
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Dividend Yield: 4.10%
(NASDAQ:
) shares currently have a dividend yield of 4.10%.
H&E Equipment Services, Inc. operates as an integrated equipment services company. The company rents, sells, and provides parts and service support for hi-lift or aerial work platform equipment, crane, earthmoving equipment, and industrial lift truck categories. The company has a P/E ratio of 15.69.
The average volume for H&E Equipment Services has been 621,800 shares per day over the past 30 days. H&E Equipment Services has a market cap of $863.2 million and is part of the diversified services industry. Shares are down 13.1% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
H&E Equipment Services
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, expanding profit margins 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:
- HEES's revenue growth has slightly outpaced the industry average of 9.6%. Since the same quarter one year prior, revenues rose by 14.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- H&E EQUIPMENT SERVICES INC has improved earnings per share by 14.6% 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, H&E EQUIPMENT SERVICES INC increased its bottom line by earning $1.56 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $1.56).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Trading Companies & Distributors industry average. The net income increased by 14.2% when compared to the same quarter one year prior, going from $14.60 million to $16.68 million.
- 45.33% is the gross profit margin for H&E EQUIPMENT SERVICES INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.60% trails the industry average.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Trading Companies & Distributors industry and the overall market, H&E EQUIPMENT SERVICES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full H&E Equipment Services Ratings Report.
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Dividend Yield: 5.30%
(NYSE:
) shares currently have a dividend yield of 5.30%.
Liberty Property Trust is a publicly owned real estate investment holding trust. Through its subsidiary, it provides leasing, property management, development, acquisition, and other tenant-related services for a portfolio of industrial and office properties. The company has a P/E ratio of 31.26.
The average volume for Liberty Property has been 915,800 shares per day over the past 30 days. Liberty Property has a market cap of $5.4 billion and is part of the real estate industry. Shares are down 4.9% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
Liberty Property
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, expanding profit margins, impressive record of earnings per share growth and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.1%. Since the same quarter one year prior, revenues slightly increased by 6.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 36.78% is the gross profit margin for LIBERTY PROPERTY TRUST which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 38.73% is above that of the industry average.
- LIBERTY PROPERTY TRUST 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, LIBERTY PROPERTY TRUST increased its bottom line by earning $1.15 versus $0.70 in the prior year. For the next year, the market is expecting a contraction of 10.4% in earnings ($1.03 versus $1.15).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Real Estate Investment Trusts (REITs) industry average, but is greater than that of the S&P 500. The net income increased by 18.1% when compared to the same quarter one year prior, going from $69.69 million to $82.34 million.
- You can view the full Liberty Property Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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