3 Buy-Rated Dividend Stocks Taking The Lead: NNN, SNH, PAA
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%.
National Retail Properties, Inc. is a publicly owned equity real estate investment trust. The firm acquires, owns, manages, and develops retail properties in the United States. The company has a P/E ratio of 33.21.
The average volume for National Retail Properties has been 1,212,500 shares per day over the past 30 days. National Retail Properties has a market cap of $5.4 billion and is part of the real estate industry. Shares are up 7.4% year-to-date as of the close of trading on Friday.
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TheStreet Ratings rates
National Retail Properties
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. 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:
- NNN's revenue growth has slightly outpaced the industry average of 10.1%. Since the same quarter one year prior, revenues rose by 10.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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. 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 gross profit margin for NATIONAL RETAIL PROPERTIES is rather high; currently it is at 62.12%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 46.57% significantly outperformed against the industry average.
- Net operating cash flow has slightly increased to $64.98 million or 9.50% when compared to the same quarter last year. Despite an increase in cash flow, NATIONAL RETAIL PROPERTIES's average is still marginally south of the industry average growth rate of 11.97%.
- NATIONAL RETAIL PROPERTIES has improved earnings per share by 29.6% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, NATIONAL RETAIL PROPERTIES increased its bottom line by earning $1.24 versus $1.06 in the prior year. For the next year, the market is expecting a contraction of 0.8% in earnings ($1.23 versus $1.24).
- You can view the full National Retail Properties Ratings Report.
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Dividend Yield: 7.00%
(NYSE:
) shares currently have a dividend yield of 7.00%.
Senior Housing Properties Trust, a real estate investment trust (REIT), primarily invests in senior housing properties in the United States. The trust invests in hospitals, nursing homes, senior apartments, independent living properties, and assisted living properties. The company has a P/E ratio of 27.51.
The average volume for Senior Housing Properties has been 2,620,700 shares per day over the past 30 days. Senior Housing Properties has a market cap of $5.2 billion and is part of the real estate industry. Shares are up 3.9% year-to-date as of the close of trading on Friday.
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TheStreet Ratings rates
Senior Housing Properties
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- SNH's revenue growth has slightly outpaced the industry average of 10.1%. Since the same quarter one year prior, revenues rose by 14.6%. 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.
- Net operating cash flow has increased to $69.38 million or 18.54% when compared to the same quarter last year. In addition, SENIOR HOUSING PPTYS TRUST has also modestly surpassed the industry average cash flow growth rate of 11.97%.
- 35.99% is the gross profit margin for SENIOR HOUSING PPTYS TRUST which we consider to be strong. Regardless of SNH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SNH's net profit margin of 19.69% is significantly lower than the industry average.
- SENIOR HOUSING PPTYS TRUST's earnings per share declined by 44.2% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, SENIOR HOUSING PPTYS TRUST reported lower earnings of $0.81 versus $0.97 in the prior year. This year, the market expects an improvement in earnings ($0.85 versus $0.81).
- You can view the full Senior Housing Properties Ratings Report.
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Dividend Yield: 5.70%
(NYSE:
) shares currently have a dividend yield of 5.70%.
Plains All American Pipeline, L.P., through with its subsidiaries, engages in the transportation, storage, terminalling, and marketing of crude oil, natural gas liquids (NGL), natural gas, and refined products in the United States and Canada. The company has a P/E ratio of 20.02.
The average volume for Plains All American Pipeline has been 1,594,600 shares per day over the past 30 days. Plains All American Pipeline has a market cap of $17.9 billion and is part of the energy industry. Shares are down 7.6% year-to-date as of the close of trading on Friday.
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TheStreet Ratings rates
Plains All American Pipeline
as a
. The company's strengths can be seen in multiple areas, such as its increase in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 26.2% when compared to the same quarter one year prior, rising from $309.00 million to $390.00 million.
- Net operating cash flow has significantly increased by 101.66% to $726.00 million when compared to the same quarter last year. In addition, PLAINS ALL AMER PIPELNE -LP has also vastly surpassed the industry average cash flow growth rate of -11.68%.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 19.6%. Since the same quarter one year prior, revenues fell by 11.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- PLAINS ALL AMER PIPELNE -LP has improved earnings per share by 15.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PLAINS ALL AMER PIPELNE -LP reported lower earnings of $2.37 versus $2.80 in the prior year. For the next year, the market is expecting a contraction of 7.2% in earnings ($2.20 versus $2.37).
- The gross profit margin for PLAINS ALL AMER PIPELNE -LP is currently extremely low, coming in at 7.37%. Regardless of PAA's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PAA's net profit margin of 4.12% compares favorably to the industry average.
- You can view the full Plains All American Pipeline Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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