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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."

Tallgrass Energy Partners

Dividend Yield: 6.60%

Tallgrass Energy Partners

(NYSE:

TEP

) shares currently have a dividend yield of 6.60%.

Tallgrass Energy Partners, LP acquires, owns, develops, and operates various midstream energy assets in North America. The company operates through three segments: Crude Oil Transportation & Logistics, Natural Gas Transportation & Logistics, and Processing & Logistics. The company has a P/E ratio of 25.58.

The average volume for Tallgrass Energy Partners has been 522,600 shares per day over the past 30 days. Tallgrass Energy Partners has a market cap of $3.3 billion and is part of the energy industry. Shares are up 11.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Tallgrass Energy Partners

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TheStreet Recommends

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and compelling growth 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 revenue growth greatly exceeded the industry average of 24.0%. Since the same quarter one year prior, revenues rose by 26.8%. 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, TALLGRASS ENERGY PRT LP'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 TALLGRASS ENERGY PRT LP is rather high; currently it is at 56.86%. It has increased significantly from the same period last year. Along with this, the net profit margin of 30.30% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 82.48% to $88.76 million when compared to the same quarter last year. In addition, TALLGRASS ENERGY PRT LP has also vastly surpassed the industry average cash flow growth rate of -49.98%.
  • 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 36.4% when compared to the same quarter one year prior, rising from $32.32 million to $44.07 million.

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Spirit Realty Capital

Dividend Yield: 5.30%

Spirit Realty Capital

(NYSE:

SRC

) shares currently have a dividend yield of 5.30%.

Spirit Realty Capital, Inc is a publicly traded real estate investment trust.

The average volume for Spirit Realty Capital has been 4,817,700 shares per day over the past 30 days. Spirit Realty Capital has a market cap of $6.4 billion and is part of the real estate industry. Shares are up 31.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Spirit Realty Capital

as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, reasonable valuation levels, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • Compared to its closing price of one year ago, SRC's share price has jumped by 28.18%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SRC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.1%. Since the same quarter one year prior, revenues slightly increased by 3.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Net operating cash flow has increased to $89.64 million or 12.59% when compared to the same quarter last year. In addition, SPIRIT REALTY CAPITAL INC has also modestly surpassed the industry average cash flow growth rate of 9.08%.
  • SPIRIT REALTY CAPITAL INC reported flat earnings per share in the most recent 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, SPIRIT REALTY CAPITAL INC turned its bottom line around by earning $0.27 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings ($0.32 versus $0.27).

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Manulife Financial

Dividend Yield: 4.20%

Manulife Financial

(NYSE:

MFC

) shares currently have a dividend yield of 4.20%.

Manulife Financial Corporation, together with its subsidiaries, provides financial advice, insurance, and wealth and asset management solutions for individuals, groups, and institutions in Asia, Canada, and the United States. The company has a P/E ratio of 14.89.

The average volume for Manulife Financial has been 2,204,500 shares per day over the past 30 days. Manulife Financial has a market cap of $27.3 billion and is part of the insurance industry. Shares are down 8.5% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Manulife Financial

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and increase in net income. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 14.2%. Since the same quarter one year prior, revenues rose by 38.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although MFC's debt-to-equity ratio of 0.29 is very low, it is currently higher than that of the industry average.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 44.5% when compared to the same quarter one year prior, rising from $723.00 million to $1,045.00 million.
  • Net operating cash flow has increased to $2,701.00 million or 30.73% when compared to the same quarter last year. In addition, MANULIFE FINANCIAL CORP has also vastly surpassed the industry average cash flow growth rate of -25.55%.

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