5 Buy-Rated Dividend Stocks

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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 and 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 5 stocks with substantial yields, that ultimately, we have rated "Buy."

AmeriGas Partners

Dividend Yield: 7.40%

AmeriGas Partners (NYSE: APU) shares currently have a dividend yield of 7.40%.

AmeriGas Partners, L.P. operates as a retail and wholesale distributor of propane gas, and related equipment and supplies in the United States. The company has a P/E ratio of 161.00. Currently there is 1 analyst that rates AmeriGas Partners a buy, 2 analysts rate it a sell, and 4 rate it a hold.

The average volume for AmeriGas Partners has been 153,200 shares per day over the past 30 days. AmeriGas Partners has a market cap of $4.0 billion and is part of the utilities industry. Shares are up 12% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates AmeriGas Partners as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, good cash flow from operations, increase in net income and growth in earnings per share. We feel these 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 3.7%. Since the same quarter one year prior, revenues rose by 28.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 48.30% is the gross profit margin for AMERIGAS PARTNERS -LP which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 11.02% is above that of the industry average.
  • Net operating cash flow has significantly increased by 441.71% to $40.49 million when compared to the same quarter last year. In addition, AMERIGAS PARTNERS -LP has also vastly surpassed the industry average cash flow growth rate of 38.61%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Gas Utilities industry. The net income increased by 127.3% when compared to the same quarter one year prior, rising from $42.53 million to $96.67 million.
  • AMERIGAS 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, AMERIGAS PARTNERS -LP swung to a loss, reporting -$0.05 versus $1.51 in the prior year. This year, the market expects an improvement in earnings ($2.46 versus -$0.05).

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Triangle Capital Corporation

Dividend Yield: 7.60%

Triangle Capital Corporation (NYSE: TCAP) shares currently have a dividend yield of 7.60%.

Triangle Capital Corporation is a business development company specializing in private equity and mezzanine investments. The company has a P/E ratio of 13.19. Currently there are 3 analysts that rate Triangle Capital Corporation a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Triangle Capital Corporation has been 245,500 shares per day over the past 30 days. Triangle Capital Corporation has a market cap of $784.2 million and is part of the financial services industry. Shares are up 9.4% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Triangle Capital Corporation as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, expanding profit margins, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.8%. Since the same quarter one year prior, revenues rose by 36.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 49.94% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TCAP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for TRIANGLE CAPITAL CORP is currently very high, coming in at 82.00%. Regardless of TCAP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TCAP's net profit margin of 62.43% significantly outperformed against the industry.
  • TRIANGLE CAPITAL CORP has improved earnings per share by 5.5% 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, TRIANGLE CAPITAL CORP reported lower earnings of $2.22 versus $2.92 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus $2.22).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Capital Markets industry average, but is greater than that of the S&P 500. The net income increased by 25.7% when compared to the same quarter one year prior, rising from $12.40 million to $15.59 million.

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Natural Resources Partners L.P

Dividend Yield: 9.60%

Natural Resources Partners L.P (NYSE: NRP) shares currently have a dividend yield of 9.60%.

Natural Resource Partners L.P., through its subsidiaries, engages in the ownership, management, and leasing of mineral properties in the United States. It owns coal reserves in Appalachia, the Illinois Basin, and the Western United States, as well as lignite reserves in the Gulf Coast region. The company has a P/E ratio of 11.61. Currently there are 4 analysts that rate Natural Resources Partners L.P a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Natural Resources Partners L.P has been 337,800 shares per day over the past 30 days. Natural Resources Partners L.P has a market cap of $2.5 billion and is part of the metals & mining industry. Shares are up 22.6% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Natural Resources Partners L.P as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, compelling growth in net income, expanding profit margins and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • NRP's revenue growth has slightly outpaced the industry average of 3.0%. Since the same quarter one year prior, revenues slightly increased by 4.9%. 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. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, NATURAL RESOURCE PARTNERS LP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • 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 519.7% when compared to the same quarter one year prior, rising from -$14.32 million to $60.11 million.
  • The gross profit margin for NATURAL RESOURCE PARTNERS LP is currently very high, coming in at 79.30%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, NRP's net profit margin of 58.67% significantly outperformed against the industry.
  • NATURAL RESOURCE PARTNERS 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, NATURAL RESOURCE PARTNERS LP increased its bottom line by earning $1.97 versus $0.53 in the prior year. For the next year, the market is expecting a contraction of 13.7% in earnings ($1.70 versus $1.97).

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Crestwood Midstream Partners

Dividend Yield: 8.20%

Crestwood Midstream Partners (NYSE: CMLP) shares currently have a dividend yield of 8.20%.

Crestwood Midstream Partners LP primarily engages in the gathering, processing, treating, compressing, transporting, and selling natural gas in the United States. The company operates in four segments: Barnett, Fayetteville, Granite Wash, and Marcellus. The company has a P/E ratio of 67.16. Currently there are 4 analysts that rate Crestwood Midstream Partners a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Crestwood Midstream Partners has been 130,400 shares per day over the past 30 days. Crestwood Midstream Partners has a market cap of $1.0 billion and is part of the energy industry. Shares are up 9.8% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Crestwood Midstream Partners as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has slightly increased to $19.13 million or 7.06% when compared to the same quarter last year. Despite an increase in cash flow, CRESTWOOD MIDSTREAM PTNRS LP's cash flow growth rate is still lower than the industry average growth rate of 28.97%.
  • 48.30% is the gross profit margin for CRESTWOOD MIDSTREAM PTNRS LP which we consider to be strong. Regardless of CMLP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CMLP's net profit margin of 8.52% compares favorably to the industry average.
  • CRESTWOOD MIDSTREAM PTNRS LP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, CRESTWOOD MIDSTREAM PTNRS LP reported lower earnings of $0.37 versus $1.00 in the prior year. This year, the market expects an improvement in earnings ($0.48 versus $0.37).
  • CMLP, with its decline in revenue, slightly underperformed the industry average of 3.0%. Since the same quarter one year prior, revenues slightly dropped by 3.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • CMLP's debt-to-equity ratio of 0.91 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.10 is sturdy.

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Pioneer Southwest Energy Partners

Dividend Yield: 8.70%

Pioneer Southwest Energy Partners (NYSE: PSE) shares currently have a dividend yield of 8.70%.

Pioneer Southwest Energy Partners L.P. engages in the production of oil and gas in the United States. The company has a P/E ratio of 7.97. Currently there are no analysts that rate Pioneer Southwest Energy Partners a buy, 2 analysts rate it a sell, and 3 rate it a hold.

The average volume for Pioneer Southwest Energy Partners has been 138,200 shares per day over the past 30 days. Pioneer Southwest Energy Partners has a market cap of $854.3 million and is part of the energy industry. Shares are up 6.7% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Pioneer Southwest Energy Partners as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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 437.2% when compared to the same quarter one year prior, rising from -$6.88 million to $23.21 million.
  • The gross profit margin for PIONEER SOUTHWEST ENERGY -LP is rather high; currently it is at 62.00%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, PSE's net profit margin of 50.24% significantly outperformed against the industry.
  • PSE, with its decline in revenue, underperformed when compared the industry average of 3.0%. Since the same quarter one year prior, revenues fell by 14.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PIONEER SOUTHWEST ENERGY -LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • PIONEER SOUTHWEST ENERGY -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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PIONEER SOUTHWEST ENERGY -LP reported lower earnings of $3.00 versus $3.69 in the prior year. For the next year, the market is expecting a contraction of 26.0% in earnings ($2.22 versus $3.00).

New From TheStreet: Jim Cramer's Protégé, Dave Peltier, only buys dividend stocks that have the potential for a 3% to 4% yield and 10% growth. Get his best picks for less than $50/year.

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Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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