3 Buy-Rated Dividend Stocks: NTI, SIX, HCN

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."

Northern Tier Energy

Dividend Yield: 15.50%

Northern Tier Energy

(NYSE:

NTI

) shares currently have a dividend yield of 15.50%.

Northern Tier Energy LP, an independent downstream energy company, engages in refining, retail, and pipeline operations in the United States. It operates through two segments, Refining and Retail. The company has a P/E ratio of 6.96.

The average volume for Northern Tier Energy has been 666,500 shares per day over the past 30 days. Northern Tier Energy has a market cap of $2.5 billion and is part of the energy industry. Shares are up 22.3% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Northern Tier Energy

as a

buy

. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, notable return on equity, attractive 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:

  • NORTHERN TIER ENERGY LP has improved earnings per share by 6.7% 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, NORTHERN TIER ENERGY LP increased its bottom line by earning $2.60 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($4.34 versus $2.60).
  • 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 7.6% when compared to the same quarter one year prior, going from $96.20 million to $103.50 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 Oil, Gas & Consumable Fuels industry and the overall market, NORTHERN TIER ENERGY LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 679.18% to $114.10 million when compared to the same quarter last year. In addition, NORTHERN TIER ENERGY LP has also vastly surpassed the industry average cash flow growth rate of -26.26%.

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Six Flags Entertainment

Dividend Yield: 4.40%

Six Flags Entertainment

(NYSE:

SIX

) shares currently have a dividend yield of 4.40%.

Six Flags Entertainment Corporation owns and operates regional theme and water parks. Its parks offer various thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues, and retail outlets. The company has a P/E ratio of 43.89.

The average volume for Six Flags Entertainment has been 755,000 shares per day over the past 30 days. Six Flags Entertainment has a market cap of $4.9 billion and is part of the leisure industry. Shares are up 22.6% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Six Flags Entertainment

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, increase in net income, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:

  • SIX's revenue growth has slightly outpaced the industry average of 1.5%. Since the same quarter one year prior, revenues slightly increased by 6.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 Hotels, Restaurants & Leisure industry and the overall market, SIX FLAGS ENTERTAINMENT CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 49.8% when compared to the same quarter one year prior, rising from $105.03 million to $157.30 million.
  • Net operating cash flow has increased to $240.52 million or 13.48% when compared to the same quarter last year. In addition, SIX FLAGS ENTERTAINMENT CORP has also modestly surpassed the industry average cash flow growth rate of 7.11%.
  • The gross profit margin for SIX FLAGS ENTERTAINMENT CORP is rather high; currently it is at 65.89%. Regardless of SIX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SIX's net profit margin of 27.34% significantly outperformed against the industry.

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Welltower

Dividend Yield: 5.30%

Welltower

(NYSE:

HCN

) shares currently have a dividend yield of 5.30%.

Welltower Inc. is an independent equity real estate investment trust. The firm engages in acquiring, planning, developing, managing, repositioning and monetizing of real estate assets. It primarily invests in the real estate markets of the United States. The company has a P/E ratio of 24.30.

The average volume for Welltower has been 2,389,000 shares per day over the past 30 days. Welltower has a market cap of $22.1 billion and is part of the real estate industry. Shares are down 16.5% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Welltower

as a

buy

. 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, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • HCN's revenue growth has slightly outpaced the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 15.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • WELLTOWER INC has improved earnings per share by 18.2% 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, WELLTOWER INC increased its bottom line by earning $1.40 versus $0.09 in the prior year. This year, the market expects an improvement in earnings ($2.47 versus $1.40).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 30.0% when compared to the same quarter one year prior, rising from $152.61 million to $198.40 million.
  • Net operating cash flow has significantly increased by 61.22% to $416.98 million when compared to the same quarter last year. In addition, WELLTOWER INC has also vastly surpassed the industry average cash flow growth rate of 9.42%.

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