Skip to main content

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."

Verizon Communications

Dividend Yield: 4.50%

Verizon Communications

(NYSE:

VZ

) shares currently have a dividend yield of 4.50%.

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 11.50.

The average volume for Verizon Communications has been 17,784,800 shares per day over the past 30 days. Verizon Communications has a market cap of $204.4 billion and is part of the telecommunications industry. Shares are up 8.9% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates

Verizon Communications

TheStreet Recommends

as a

buy

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, notable return on equity, expanding profit margins and good cash flow from operations. 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 341.6% when compared to the same quarter one year prior, rising from -$2,231.00 million to $5,391.00 million.
  • VZ's revenue growth trails the industry average of 16.4%. Since the same quarter one year prior, revenues slightly increased by 3.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, VERIZON COMMUNICATIONS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 57.06%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.73% is above that of the industry average.
  • Net operating cash flow has increased to $10,504.00 million or 40.54% when compared to the same quarter last year. Despite an increase in cash flow, VERIZON COMMUNICATIONS INC's average is still marginally south of the industry average growth rate of 45.46%.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

PPL

Dividend Yield: 4.20%

PPL

(NYSE:

PPL

) shares currently have a dividend yield of 4.20%.

PPL Corporation, a utility company, delivers electricity and natural gas in the United States and the United Kingdom. It serves 321,000 natural gas and 397,000 electric customers in Louisville and 16 surrounding counties; and 543,000 customers in 77 Kentucky counties and 5 counties in Virginia. The company has a P/E ratio of 15.20.

The average volume for PPL has been 5,026,700 shares per day over the past 30 days. PPL has a market cap of $24.2 billion and is part of the utilities industry. Shares are up 5.5% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates

PPL

as a

buy

. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • 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. Compared to other companies in the Electric Utilities industry and the overall market, PPL CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • 46.97% is the gross profit margin for PPL CORP which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 22.41% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $898.00 million or 15.87% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -9.31%.
  • 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.
  • PPL, with its very weak revenue results, has greatly underperformed against the industry average of 8.1%. Since the same quarter one year prior, revenues plummeted by 55.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Compass Minerals International

Dividend Yield: 4.20%

Compass Minerals International

(NYSE:

CMP

) shares currently have a dividend yield of 4.20%.

Compass Minerals International, Inc. produces and markets salt, sulfate of potash specialty fertilizer (SOP), plant micronutrients, and magnesium chloride primarily in North America and the United Kingdom. The company has a P/E ratio of 14.17.

The average volume for Compass Minerals International has been 358,900 shares per day over the past 30 days. Compass Minerals International has a market cap of $2.2 billion and is part of the metals & mining industry. Shares are down 8% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates

Compass Minerals International

as a

buy

. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

  • 41.06% is the gross profit margin for COMPASS MINERALS INTL INC which we consider to be strong. It has increased from the same quarter the previous year.
  • Despite the weak revenue results, CMP has outperformed against the industry average of 49.7%. Since the same quarter one year prior, revenues fell by 33.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income has significantly decreased by 27.4% when compared to the same quarter one year ago, falling from $80.50 million to $58.40 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market, COMPASS MINERALS INTL INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The debt-to-equity ratio of 1.14 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, CMP's quick ratio is somewhat strong at 1.21, demonstrating the ability to handle short-term liquidity needs.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Other helpful dividend tools from TheStreet: