5 Buy-Rated Stocks Outyielding 'The 10-Year'

NEW YORK ( TheStreet) -- In today's ultra-low interest rate environment, long-term investors may wish to consider dividend stocks as an alternative -- or supplement -- to fixed income investments.

At 2.14%, the dividend yield of the S&P 500 index is around 50 basis points in excess of the 10-year Treasury note. This is historically significant. From 1959 to 2009, the yield of the U.S. Treasury note consistently exceeded the yield of the S&P 500.
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While the yield of the S&P 500 is paltry by absolute and historical standards, a diverse basket of fairly priced stocks offers a reasonable likelihood of capital preservation (in the long term).

Each of the five stocks on the following pages has a higher dividend yield than the 10-year U.S. Treasury note and has a buy rating from TheStreet Ratings. They may make an attractive addition to your income portfolio.

TheStreet Ratings stock-rating model favors defensive investments with a bias toward conservatively financed companies that have demonstrated a history of favorable shareholder returns. As always, stock ratings should not be treated as gospel -- rather, use them as a starting point for your own research.

Target

Target ( TGT) was incorporated in Minnesota in 1902. The company operates retail stores in the U.S. and Canada.

Dividend Yield: 2.08%

Rated "A (Buy)" by TheStreet Ratings: Target's gross profit margin for the first quarter of its fiscal year 2012 is essentially unchanged when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. Target has weak liquidity. Currently, the Quick Ratio is 0.50 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 4.15% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

Comcast

Comcast ( CMCSA) is a provider of cable services, offering a variety of entertainment, information and communications services to residential and commercial customers.

Dividend Yield: 2.25%

Rated "A+ (Buy)" by TheStreet Ratings: Comcast's gross profit margin for the first quarter of its fiscal year 2012 has decreased when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. Comcast has very weak liquidity. Currently, the Quick Ratio is 0.44 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 2.47% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

Chevron

Chevron ( CVX) provides administrative, financial, management and technology support to U.S. and international subsidiaries that engage operations of petroleum, chemicals, mining, power generation and energy services.

Dividend Yield: 3.73%

Rated "A (Buy)" by TheStreet Ratings: Chevron's gross profit margin for the first quarter of its fiscal year 2012 has increased when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. Chevron has average liquidity. Currently, the Quick Ratio is 1.22 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 13.99% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

Pfizer

Pfizer ( PFE) is a research-based, global pharmaceutical company, which discovers, develops, manufactures and markets prescription medicines for humans and animals.

Dividend Yield: 4.07%

Rated "A (Buy)" by TheStreet Ratings: Pfizer's gross profit margin for the first quarter of its fiscal year 2012 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. Pfizer has average liquidity. Currently, the Quick Ratio is 1.41 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 7.56% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

ConocoPhillips

ConocoPhillips ( COP) is an international, integrated energy company.

Dividend Yield: 5.15%

Rated "B (Buy)" by TheStreet Ratings: ConocoPhillips' gross profit margin for the first quarter of its fiscal year 2012 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. ConocoPhillips has weak liquidity. Currently, the Quick Ratio is 0.76 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 4.91% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.