Buy-Rated Dividend Stocks: Top 3 Companies: EPD, GEO, GEL
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: 4.50%
(NYSE:
) shares currently have a dividend yield of 4.50%.
Enterprise Products Partners L.P. provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products in the United States and internationally. The company has a P/E ratio of 22.44.
The average volume for Enterprise Products Partners has been 3,274,600 shares per day over the past 30 days. Enterprise Products Partners has a market cap of $63.9 billion and is part of the energy industry. Shares are down 10.7% year-to-date as of the close of trading on Tuesday.
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TheStreet Ratings rates
Enterprise Products Partners
as a
. The company's strongest point has been its 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:
- EPD, with its decline in revenue, slightly underperformed the industry average of 19.6%. Since the same quarter one year prior, revenues fell by 22.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The change in net income 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 has decreased by 5.6% when compared to the same quarter one year ago, dropping from $698.90 million to $659.80 million.
- ENTERPRISE PRODS PRTNRS -LP's earnings per share declined by 9.3% 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, ENTERPRISE PRODS PRTNRS -LP increased its bottom line by earning $1.48 versus $1.41 in the prior year. For the next year, the market is expecting a contraction of 4.7% in earnings ($1.41 versus $1.48).
- The gross profit margin for ENTERPRISE PRODS PRTNRS -LP is currently extremely low, coming in at 12.42%. Regardless of EPD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, EPD's net profit margin of 6.47% compares favorably to the industry average.
- Net operating cash flow has declined marginally to $1,457.80 million or 2.76% when compared to the same quarter last year. Despite a decrease in cash flow of 2.76%, ENTERPRISE PRODS PRTNRS -LP is in line with the industry average cash flow growth rate of -11.68%.
- You can view the full Enterprise Products Partners Ratings Report.
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Dividend Yield: 5.60%
(NYSE:
) shares currently have a dividend yield of 5.60%.
The GEO Group, Inc. provides government-outsourced services specializing in the management of correctional, detention, and re-entry facilities, and the provision of community based services and youth services in the United States, Australia, South Africa, the United Kingdom, and Canada. The company has a P/E ratio of 22.52.
The average volume for GEO Group has been 462,800 shares per day over the past 30 days. GEO Group has a market cap of $3.3 billion and is part of the real estate industry. Shares are up 9.8% year-to-date as of the close of trading on Tuesday.
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TheStreet Ratings rates
GEO Group
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- GEO's revenue growth has slightly outpaced the industry average of 10.1%. Since the same quarter one year prior, revenues rose by 11.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 36.84% and other important driving factors, this stock has surged by 37.84% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GEO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- GEO GROUP INC has improved earnings per share by 36.8% 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 year. We feel that this trend should continue. During the past fiscal year, GEO GROUP INC increased its bottom line by earning $1.99 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($2.06 versus $1.99).
- 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 37.8% when compared to the same quarter one year prior, rising from $27.61 million to $38.05 million.
- You can view the full GEO Group Ratings Report.
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Dividend Yield: 5.30%
(NYSE:
) shares currently have a dividend yield of 5.30%.
Genesis Energy, L.P. operates in the midstream segment of the oil and gas industry in the Gulf Coast region of the United States. Its Onshore Pipeline Transportation segment transports crude oil and carbon dioxide (CO2). The company has a P/E ratio of 38.19.
The average volume for Genesis Energy has been 317,100 shares per day over the past 30 days. Genesis Energy has a market cap of $4.3 billion and is part of the energy industry. Shares are up 9.1% year-to-date as of the close of trading on Tuesday.
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TheStreet Ratings rates
Genesis Energy
as a
. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth 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:
- GENESIS ENERGY -LP has improved earnings per share by 47.4% 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 year. We feel that this trend should continue. During the past fiscal year, GENESIS ENERGY -LP increased its bottom line by earning $1.19 versus $1.00 in the prior year. This year, the market expects an improvement in earnings ($1.65 versus $1.19).
- 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 46.3% when compared to the same quarter one year prior, rising from $17.89 million to $26.17 million.
- 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 11.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, GENESIS ENERGY -LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for GENESIS ENERGY -LP is currently extremely low, coming in at 4.82%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.08% trails that of the industry average.
- You can view the full Genesis Energy Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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