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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."

BioMed Realty

Dividend Yield: 5.20%

BioMed Realty

(NYSE:

BMR

) shares currently have a dividend yield of 5.20%.

BioMed Realty Trust, Inc. operates as a real estate investment trust (REIT) that focuses on providing real estate to the life science industry in the United States. The company has a P/E ratio of 20.85.

The average volume for BioMed Realty has been 1,510,400 shares per day over the past 30 days. BioMed Realty has a market cap of $4.1 billion and is part of the real estate industry. Shares are down 6.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

TheStreet Recommends

BioMed Realty

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.6%. Since the same quarter one year prior, revenues slightly increased by 5.6%. 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.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, BIOMED REALTY TRUST INC's return on equity is below that of both the industry average and the S&P 500.
  • BIOMED REALTY TRUST INC's earnings per share declined by 20.0% 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, BIOMED REALTY TRUST INC increased its bottom line by earning $0.98 versus $0.20 in the prior year. For the next year, the market is expecting a contraction of 73.5% in earnings ($0.26 versus $0.98).
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, BMR has underperformed the S&P 500 Index, declining 8.84% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.

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NuStar Energy L.P

Dividend Yield: 7.40%

NuStar Energy L.P

(NYSE:

NS

) shares currently have a dividend yield of 7.40%.

NuStar Energy L.P. engages in the terminalling, storage, and marketing of petroleum products; and transportation of petroleum products and anhydrous ammonia primarily in the United States and the Netherlands. It operates through three segments: Pipeline, Storage, and Fuels Marketing. The company has a P/E ratio of 18.23.

The average volume for NuStar Energy L.P has been 286,400 shares per day over the past 30 days. NuStar Energy L.P has a market cap of $4.6 billion and is part of the energy industry. Shares are up 3.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

NuStar Energy L.P

as a

buy

. 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, reasonable valuation levels, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • NUSTAR ENERGY LP reported significant earnings per share improvement 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 two years. We feel that this trend should continue. During the past fiscal year, NUSTAR ENERGY LP turned its bottom line around by earning $2.14 versus -$2.82 in the prior year. This year, the market expects an improvement in earnings ($3.35 versus $2.14).
  • 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 221.8% when compared to the same quarter one year prior, rising from $39.74 million to $127.90 million.
  • Net operating cash flow has significantly increased by 93.57% to $122.58 million when compared to the same quarter last year. In addition, NUSTAR ENERGY LP has also vastly surpassed the industry average cash flow growth rate of -53.30%.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, NUSTAR ENERGY LP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

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Sabra Health Care REIT

Dividend Yield: 5.70%

Sabra Health Care REIT

(NASDAQ:

SBRA

) shares currently have a dividend yield of 5.70%.

Sabra Health Care REIT, Inc. operates as a real estate investment trust in the United States. The company, through its subsidiaries, owns and invests in real estate properties for the healthcare industry. The company has a P/E ratio of 20.76.

The average volume for Sabra Health Care REIT has been 466,300 shares per day over the past 30 days. Sabra Health Care REIT has a market cap of $1.6 billion and is part of the real estate industry. Shares are down 10.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Sabra Health Care REIT

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations 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 came in higher than the industry average of 8.6%. Since the same quarter one year prior, revenues rose by 36.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SABRA HEALTH CARE REIT INC reported significant earnings per share improvement 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 two years. We feel that this trend should continue. During the past fiscal year, SABRA HEALTH CARE REIT INC increased its bottom line by earning $0.69 versus $0.67 in the prior year. This year, the market expects an improvement in earnings ($1.22 versus $0.69).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 366.3% when compared to the same quarter one year prior, rising from -$7.30 million to $19.45 million.
  • Net operating cash flow has significantly increased by 1946.47% to $24.70 million when compared to the same quarter last year. In addition, SABRA HEALTH CARE REIT INC has also vastly surpassed the industry average cash flow growth rate of 2.08%.
  • The gross profit margin for SABRA HEALTH CARE REIT INC is rather high; currently it is at 60.14%. Regardless of SBRA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SBRA's net profit margin of 34.99% compares favorably to the industry average.

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