3 Buy-Rated Dividend Stocks Leading The Pack: NVEC, SBRA, AB

These 3 dividend stocks are rated a Buy by TheStreet
By TheStreet Wire ,

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."

NVE

Dividend Yield: 7.20%

NVE

(NASDAQ:

NVEC

) shares currently have a dividend yield of 7.20%.

NVE Corporation develops and sells devices using spintronics, a nanotechnology that utilizes electron spin rather than electron charge to acquire, store, and transmit information. The company has a P/E ratio of 20.04.

The average volume for NVE has been 20,900 shares per day over the past 30 days. NVE has a market cap of $270.8 million and is part of the electronics industry. Shares are down 19.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

NVE

as a

buy

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • NVEC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 36.04, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has slightly increased to $2.67 million or 5.99% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -22.28%.
  • The gross profit margin for NVE CORP is currently very high, coming in at 80.26%. Regardless of NVEC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NVEC's net profit margin of 45.48% significantly outperformed against the industry.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, NVE CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • NVEC, with its decline in revenue, slightly underperformed the industry average of 10.8%. Since the same quarter one year prior, revenues fell by 11.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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Sabra Health Care REIT

Dividend Yield: 8.90%

Sabra Health Care REIT

(NASDAQ:

SBRA

) shares currently have a dividend yield of 8.90%.

Sabra Health Care REIT, Inc. operates as a real estate investment trust in the United States. The company, through its subsidiaries, owns and invests in real estate properties for the healthcare industry. The company has a P/E ratio of 15.84.

The average volume for Sabra Health Care REIT has been 470,000 shares per day over the past 30 days. Sabra Health Care REIT has a market cap of $1.2 billion and is part of the real estate industry. Shares are down 39.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Sabra Health Care REIT

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, reasonable valuation levels, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 36.3%. 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 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 5.0% when compared to the same quarter one year prior, going from $17.20 million to $18.06 million.
  • SABRA HEALTH CARE REIT INC's earnings per share declined by 22.6% 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, SABRA HEALTH CARE REIT INC increased its bottom line by earning $0.69 versus $0.67 in the prior year. This year, the market expects an improvement in earnings ($1.11 versus $0.69).
  • The gross profit margin for SABRA HEALTH CARE REIT INC is currently very high, coming in at 72.79%. Regardless of SBRA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SBRA's net profit margin of 30.13% compares favorably to the industry average.

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AllianceBernstein

Dividend Yield: 7.10%

AllianceBernstein

(NYSE:

AB

) shares currently have a dividend yield of 7.10%.

AllianceBernstein Holding L.P. is publicly owned investment manager. The firm also provides research services to its clients. The company has a P/E ratio of 11.18.

The average volume for AllianceBernstein has been 241,200 shares per day over the past 30 days. AllianceBernstein has a market cap of $2.4 billion and is part of the financial services industry. Shares are down 4.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

AllianceBernstein

as a

buy

. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • ALLIANCEBERNSTEIN HOLDING LP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, ALLIANCEBERNSTEIN HOLDING LP increased its bottom line by earning $1.86 versus $1.72 in the prior year. This year, the market expects an improvement in earnings ($1.87 versus $1.86).
  • The gross profit margin for ALLIANCEBERNSTEIN HOLDING LP is currently very high, coming in at 100.00%. AB has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, AB's net profit margin of 87.13% significantly outperformed against the industry.
  • Net operating cash flow has slightly increased to $47.14 million or 9.21% when compared to the same quarter last year. Despite an increase in cash flow of 9.21%, ALLIANCEBERNSTEIN HOLDING LP is still growing at a significantly lower rate than the industry average of 265.45%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, ALLIANCEBERNSTEIN HOLDING LP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.9%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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