Buy These Top 3 Buy-Rated Dividend Stocks Today: VZ, DHT, HE
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%.
Verizon Communications Inc., through its subsidiaries, provides communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide. The company has a P/E ratio of 12.61.
The average volume for Verizon Communications has been 13,194,600 shares per day over the past 30 days. Verizon Communications has a market cap of $226.7 billion and is part of the telecommunications industry. Shares are up 19.8% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
Verizon Communications
as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, expanding profit margins, growth in earnings per share and increase in net income. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the ratings report include:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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.
- VZ's revenue growth trails the industry average of 19.9%. Since the same quarter one year prior, revenues slightly increased by 0.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 60.80%. Regardless of VZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VZ's net profit margin of 13.39% compares favorably to the industry average.
- VERIZON COMMUNICATIONS INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, VERIZON COMMUNICATIONS INC increased its bottom line by earning $4.37 versus $2.51 in the prior year. For the next year, the market is expecting a contraction of 11.0% in earnings ($3.89 versus $4.37).
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry average. The net income increased by 2.1% when compared to the same quarter one year prior, going from $4,219.00 million to $4,310.00 million.
- You can view the full Verizon Communications Ratings Report.
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Dividend Yield: 20.00%
(NYSE:
) shares currently have a dividend yield of 20.00%.
DHT Holdings, Inc., together with its subsidiaries, owns and operates crude oil tankers in Bermuda. As of March 16, 2016, its fleet consisted of 20 crude oil tankers, including 17 very large crude carriers (VLCC), 1 Suezmax tanker, and 2 Aframax tankers. The company has a P/E ratio of 4.82.
The average volume for DHT Holdings has been 2,477,600 shares per day over the past 30 days. DHT Holdings has a market cap of $467.8 million and is part of the transportation industry. Shares are down 37.5% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
DHT Holdings
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, notable return on equity, attractive valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 23.9%. Since the same quarter one year prior, revenues rose by 12.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, DHT HOLDINGS INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- The gross profit margin for DHT HOLDINGS INC is currently very high, coming in at 70.62%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 29.31% significantly outperformed against the industry average.
- Net operating cash flow has increased to $58.94 million or 37.81% when compared to the same quarter last year. In addition, DHT HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of -49.64%.
- You can view the full DHT Holdings Ratings Report.
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Dividend Yield: 4.10%
(NYSE:
) shares currently have a dividend yield of 4.10%.
Hawaiian Electric Industries, Inc., through its subsidiaries, engages in the electric utility and banking businesses primarily in the State of Hawaii. The company is involved in the production, purchase, transmission, distribution, and sale of electricity. The company has a P/E ratio of 20.36.
The average volume for Hawaiian Electric Industries has been 543,800 shares per day over the past 30 days. Hawaiian Electric Industries has a market cap of $3.3 billion and is part of the utilities industry. Shares are up 6.2% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
Hawaiian Electric Industries
as a
. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, increase in net income, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- Net operating cash flow has increased to $170.59 million or 23.07% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.42%.
- The net income growth from the same quarter one year ago has exceeded that of the Electric Utilities industry average, but is less than that of the S&P 500. The net income increased by 1.5% when compared to the same quarter one year prior, going from $32.34 million to $32.83 million.
- HAWAIIAN ELECTRIC INDS' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, HAWAIIAN ELECTRIC INDS reported lower earnings of $1.50 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $1.50).
- HE, with its decline in revenue, slightly underperformed the industry average of 7.5%. Since the same quarter one year prior, revenues fell by 13.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full Hawaiian Electric Industries Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.