Don't Miss Out: Top 3 Yielding Buy-Rated Stocks: GLP, FDUS, AB
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: 7.10%
(NYSE:
) shares currently have a dividend yield of 7.10%.
Global Partners LP distributes gasoline, distillates, residual oil, renewable fuels, crude oil, natural gas, and propane to wholesalers, retailers, and commercial customers in the New England states and New York. The company has a P/E ratio of 8.89.
The average volume for Global Partners has been 105,900 shares per day over the past 30 days. Global Partners has a market cap of $1.0 billion and is part of the wholesale industry. Shares are up 11.2% year-to-date as of the close of trading on Tuesday.
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TheStreet Ratings rates
Global Partners
as a
. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, attractive valuation levels, good cash flow from operations, notable return on equity and impressive record of earnings per share growth. We feel these 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 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 64.7% when compared to the same quarter one year prior, rising from $25.82 million to $42.51 million.
- Net operating cash flow has significantly increased by 296.15% to $144.37 million when compared to the same quarter last year. In addition, GLOBAL PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -11.94%.
- 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. In comparison to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, GLOBAL PARTNERS LP has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
- GLOBAL PARTNERS LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GLOBAL PARTNERS LP reported lower earnings of $1.43 versus $1.65 in the prior year. This year, the market expects an improvement in earnings ($3.45 versus $1.43).
- You can view the full Global Partners Ratings Report.
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Dividend Yield: 9.00%
(NASDAQ:
) shares currently have a dividend yield of 9.00%.
Fidus Investment Corporation operates as an externally managed, closed-end, and non-diversified management investment company. The company provides customized debt and equity financing solutions to lower middle-market companies in the United States. The company has a P/E ratio of 7.64.
The average volume for Fidus Investment has been 83,700 shares per day over the past 30 days. Fidus Investment has a market cap of $272.4 million and is part of the financial services industry. Shares are up 14.3% year-to-date as of the close of trading on Tuesday.
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TheStreet Ratings rates
Fidus Investment
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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 rose by 10.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Capital Markets industry average. The net income increased by 16.8% when compared to the same quarter one year prior, going from $4.54 million to $5.30 million.
- The gross profit margin for FIDUS INVESTMENT CORP is rather high; currently it is at 67.05%. Regardless of FDUS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FDUS's net profit margin of 46.81% significantly outperformed against the industry.
- FIDUS INVESTMENT CORP has improved earnings per share by 15.2% 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 year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, FIDUS INVESTMENT CORP increased its bottom line by earning $2.01 versus $1.91 in the prior year. For the next year, the market is expecting a contraction of 17.2% in earnings ($1.67 versus $2.01).
- FDUS has underperformed the S&P 500 Index, declining 17.99% from its price level of one year ago. 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.
- You can view the full Fidus Investment Ratings Report.
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Dividend Yield: 8.10%
(NYSE:
) shares currently have a dividend yield of 8.10%.
AllianceBernstein Holding L.P. provides investment management and related services in the United States and internationally. The company has a P/E ratio of 13.49.
The average volume for AllianceBernstein Holding L.P has been 340,100 shares per day over the past 30 days. AllianceBernstein Holding L.P has a market cap of $2.8 billion and is part of the financial services industry. Shares are up 8.6% year-to-date as of the close of trading on Tuesday.
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TheStreet Ratings rates
AllianceBernstein Holding L.P
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, solid stock price performance and increase in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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 0.9%. 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 $43.24 million or 32.95% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 6.53%.
- ALLIANCEBERNSTEIN HOLDING LP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ALLIANCEBERNSTEIN HOLDING LP increased its bottom line by earning $1.86 versus $1.72 in the prior year. This year, the market expects an improvement in earnings ($2.06 versus $1.86).
- The gross profit margin for ALLIANCEBERNSTEIN HOLDING LP is currently very high, coming in at 100.00%. AB has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, AB's net profit margin of 90.72% significantly outperformed against the industry.
- 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, despite the company's weak earnings results. 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.
- You can view the full AllianceBernstein Holding L.P Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.
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