3 Buy-Rated Dividend Stocks Taking The Lead: TCPC, BKEP, GBDC
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: 8.90%
(NASDAQ:
) shares currently have a dividend yield of 8.90%.
TCP Capital Corp. is a business development company specializing in direct equity and debt investments in middle-market, senior secured loans, junior loans, originated loans, mezzanine, senior debt instruments, bonds, and secondary-market investments. It seeks to invest in the United States. The company has a P/E ratio of 10.41.
The average volume for TCP Capital has been 260,200 shares per day over the past 30 days. TCP Capital has a market cap of $691.0 million and is part of the financial services industry. Shares are down 3.8% year-to-date as of the close of trading on Wednesday.
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TheStreet Ratings rates
TCP Capital
as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- TCPC's very impressive revenue growth greatly exceeded the industry average of 13.1%. Since the same quarter one year prior, revenues leaped by 57.3%. 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 gross profit margin for TCP CAPITAL CORP is currently very high, coming in at 81.95%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 43.50% significantly outperformed against the industry average.
- TCP CAPITAL CORP's earnings per share declined by 39.6% 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, TCP CAPITAL CORP increased its bottom line by earning $1.94 versus $1.20 in the prior year. For the next year, the market is expecting a contraction of 20.1% in earnings ($1.55 versus $1.94).
- The share price of TCP CAPITAL CORP has not done very well: it is down 5.07% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- Net operating cash flow has decreased to -$161.37 million or 21.98% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full TCP Capital Ratings Report.
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Dividend Yield: 7.50%
(NASDAQ:
) shares currently have a dividend yield of 7.50%.
Blueknight Energy Partners, L.P., together with its subsidiaries, provides integrated terminalling, storage, processing, gathering, and transportation services for companies engaged in the production, distribution, and marketing of crude oil and asphalt products in the United States. The company has a P/E ratio of 10.27.
The average volume for Blueknight Energy Partners has been 80,000 shares per day over the past 30 days. Blueknight Energy Partners has a market cap of $238.9 million and is part of the energy industry. Shares are up 9.6% year-to-date as of the close of trading on Wednesday.
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TheStreet Ratings rates
Blueknight Energy Partners
as a
. The company's strengths can be seen in multiple areas, such as its increase in net income and expanding profit margins. 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 significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 6.9% when compared to the same quarter one year prior, going from $10.54 million to $11.27 million.
- 43.70% is the gross profit margin for BLUEKNIGHT ENERGY PRTNRS LP which we consider to be strong. Regardless of BKEP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BKEP's net profit margin of 23.30% significantly outperformed against the industry.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 19.8%. Since the same quarter one year prior, revenues fell by 11.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Net operating cash flow has declined marginally to $19.45 million or 5.20% when compared to the same quarter last year. Despite a decrease in cash flow of 5.20%, BLUEKNIGHT ENERGY PRTNRS LP is in line with the industry average cash flow growth rate of -12.15%.
- The share price of BLUEKNIGHT ENERGY PRTNRS LP has not done very well: it is down 19.54% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Despite the decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.
- You can view the full Blueknight Energy Partners Ratings Report.
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Dividend Yield: 7.30%
(NASDAQ:
) shares currently have a dividend yield of 7.30%.
Golub Capital BDC, Inc. is a business development company and operates as an externally managed closed-end non-diversified management investment company. It invests in debt and minority equity investments in middle-market companies that are, in most cases, sponsored by private equity investors. The company has a P/E ratio of 12.33.
The average volume for Golub Capital BDC has been 156,900 shares per day over the past 30 days. Golub Capital BDC has a market cap of $826.0 million and is part of the financial services industry. Shares are down 2.3% year-to-date as of the close of trading on Wednesday.
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TheStreet Ratings rates
Golub Capital BDC
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, increase in net income and notable return on equity. 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 revenue growth came in higher than the industry average of 13.1%. Since the same quarter one year prior, revenues slightly increased by 7.7%. 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 GOLUB CAPITAL BDC INC is currently very high, coming in at 73.52%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 55.08% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 70.59% to -$40.85 million when compared to the same quarter last year. In addition, GOLUB CAPITAL BDC INC has also vastly surpassed the industry average cash flow growth rate of 6.53%.
- The net income growth from the same quarter one year ago has exceeded that of the Capital Markets industry average, but is less than that of the S&P 500. The net income increased by 2.3% when compared to the same quarter one year prior, going from $14.84 million to $15.17 million.
- 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. When compared to other companies in the Capital Markets industry and the overall market, GOLUB CAPITAL BDC INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Golub Capital BDC Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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