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."

Ryman Hospitality Properties

Dividend Yield: 4.30%

Ryman Hospitality Properties (NYSE: RHP) shares currently have a dividend yield of 4.30%.

Ryman Hospitality Properties, Inc. owns and operates hotels in the United States. Currently there are 4 analysts that rate Ryman Hospitality Properties a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Ryman Hospitality Properties has been 1,162,400 shares per day over the past 30 days. Ryman Hospitality Properties has a market cap of $2.4 billion and is part of the leisure industry. Shares are up 18.4% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Ryman Hospitality Properties as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, RHP's share price has jumped by 49.47%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • 39.20% is the gross profit margin for RYMAN HOSPITALITY PPTYS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -5.61% is in-line with the industry average.
  • RYMAN HOSPITALITY PPTYS INC 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 year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, RYMAN HOSPITALITY PPTYS INC swung to a loss, reporting -$0.60 versus $0.20 in the prior year. This year, the market expects an improvement in earnings ($1.64 versus -$0.60).
  • RHP, with its decline in revenue, underperformed when compared the industry average of 16.4%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, RYMAN HOSPITALITY PPTYS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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Hospitality Properties

Dividend Yield: 7.10%

Hospitality Properties (NYSE: HPT) shares currently have a dividend yield of 7.10%.

Hospitality Properties Trust, a real estate investment trust (REIT), engages in buying, owning, and leasing hotels. The company has a P/E ratio of 31.44. Currently there is 1 analyst that rates Hospitality Properties a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Hospitality Properties has been 1,231,600 shares per day over the past 30 days. Hospitality Properties has a market cap of $3.3 billion and is part of the real estate industry. Shares are up 12.3% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Hospitality Properties as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and increase in stock price during the past year. We feel these 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 16.4%. Since the same quarter one year prior, revenues slightly increased by 9.0%. 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.
  • HOSPITALITY PROPERTIES TRUST's earnings per share declined by 40.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, HOSPITALITY PROPERTIES TRUST reported lower earnings of $0.84 versus $1.30 in the prior year. This year, the market expects an improvement in earnings ($0.87 versus $0.84).
  • In its most recent trading session, HPT has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • The gross profit margin for HOSPITALITY PROPERTIES TRUST is rather low; currently it is at 20.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 8.25% significantly trails the industry average.

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Lexmark International

Dividend Yield: 4.70%

Lexmark International (NYSE: LXK) shares currently have a dividend yield of 4.70%.

Lexmark International, Inc. develops, manufactures, and supplies printing and imaging solutions for offices. It offers laser printers, inkjet printers, and multifunction devices, as well as cartridges and other supplies, services, and solutions. The company has a P/E ratio of 16.78. Currently there are no analysts that rate Lexmark International a buy, 5 analysts rate it a sell, and 4 rate it a hold.

The average volume for Lexmark International has been 1,154,400 shares per day over the past 30 days. Lexmark International has a market cap of $1.6 billion and is part of the computer hardware industry. Shares are up 10.5% year to date as of the close of trading on Thursday.

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

Highlights from the ratings report include:
  • LEXMARK INTL INC 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, LEXMARK INTL INC reported lower earnings of $1.49 versus $4.11 in the prior year. This year, the market expects an improvement in earnings ($3.84 versus $1.49).
  • LXK, with its decline in revenue, underperformed when compared the industry average of 18.0%. Since the same quarter one year prior, revenues slightly dropped by 8.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.51, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.99 is weak.
  • 43.90% is the gross profit margin for LEXMARK INTL INC which we consider to be strong. Regardless of LXK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LXK's net profit margin of 0.65% is significantly lower than the industry average.
  • Net operating cash flow has decreased to $138.40 million or 15.60% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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Lorillard

Dividend Yield: 5.50%

Lorillard (NYSE: LO) shares currently have a dividend yield of 5.50%.

Lorillard, Inc. manufactures and sells cigarettes in the United States. The company operates through two segments, Cigarettes and Electronic Cigarettes. The Cigarettes segment manufactures and sells cigarettes. The company has a P/E ratio of 14.28. Currently there are 4 analysts that rate Lorillard a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Lorillard has been 3,653,800 shares per day over the past 30 days. Lorillard has a market cap of $15.2 billion and is part of the tobacco industry. Shares are up 3% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Lorillard as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, good cash flow from operations and expanding profit margins. We feel these 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 7.5%. Since the same quarter one year prior, revenues slightly increased by 7.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • LORILLARD INC's earnings per share improvement from the most recent quarter was slightly positive. 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, LORILLARD INC increased its bottom line by earning $2.81 versus $2.67 in the prior year. This year, the market expects an improvement in earnings ($3.09 versus $2.81).
  • Net operating cash flow has slightly increased to $529.00 million or 7.73% when compared to the same quarter last year. Despite an increase in cash flow of 7.73%, LORILLARD INC is still growing at a significantly lower rate than the industry average of 67.72%.
  • The gross profit margin for LORILLARD INC is rather high; currently it is at 54.10%. Regardless of LO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LO's net profit margin of 25.57% compares favorably to the industry average.
  • LO has underperformed the S&P 500 Index, declining 8.59% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

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.

National Retail Properties

Dividend Yield: 4.50%

National Retail Properties (NYSE: NNN) shares currently have a dividend yield of 4.50%.

National Retail Properties, Inc. is a publicly owned equity real estate investment trust. The firm acquires, owns, manages, and develops retail properties in the United States. The company has a P/E ratio of 35.23. Currently there are 5 analysts that rate National Retail Properties a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for National Retail Properties has been 971,200 shares per day over the past 30 days. National Retail Properties has a market cap of $4.0 billion and is part of the real estate industry. Shares are up 11.9% year to date as of the close of trading on Thursday.

TheStreet Ratings rates National Retail Properties as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, revenue growth, expanding profit margins and growth in earnings per share. 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:
  • 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 31.34% 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, NNN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 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 47.5% when compared to the same quarter one year prior, rising from $27.57 million to $40.66 million.
  • NNN's revenue growth trails the industry average of 16.4%. Since the same quarter one year prior, revenues slightly increased by 5.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for NATIONAL RETAIL PROPERTIES is rather high; currently it is at 60.70%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 45.57% significantly outperformed against the industry average.
  • NATIONAL RETAIL PROPERTIES's earnings per share improvement from the most recent quarter was slightly positive. 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, NATIONAL RETAIL PROPERTIES increased its bottom line by earning $0.98 versus $0.90 in the prior year. This year, the market expects an improvement in earnings ($1.15 versus $0.98).

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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