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."

Dorchester Minerals L.P

Dividend Yield: 7.50%

Dorchester Minerals L.P (NASDAQ: DMLP) shares currently have a dividend yield of 7.50%.

Dorchester Minerals, L.P. engages in the acquisition, ownership, and administration of producing and nonproducing natural gas and crude oil royalty, net profits, and leasehold interests in 574 counties and 25 states. The company has a P/E ratio of 19.33.

The average volume for Dorchester Minerals L.P has been 51,900 shares per day over the past 30 days. Dorchester Minerals L.P has a market cap of $711.7 million and is part of the financial services industry. Shares are up 14.1% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Dorchester Minerals L.P as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. 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 exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry average. The net income increased by 5.4% when compared to the same quarter one year prior, going from $13.20 million to $13.92 million.
  • DMLP has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 53.53, which clearly demonstrates the ability to cover short-term cash needs.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, DORCHESTER MINERALS -LP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for DORCHESTER MINERALS -LP is currently very high, coming in at 94.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 68.81% significantly outperformed against the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 1.7%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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.

Great Northern Iron Ore

Dividend Yield: 12.10%

Great Northern Iron Ore (NYSE: GNI) shares currently have a dividend yield of 12.10%.

Great Northern Iron Ore Properties, a conventional nonvoting trust, owns and leases mineral and non-mineral properties on the Mesabi Iron Range in northeastern Minnesota. The company has a P/E ratio of 5.57.

The average volume for Great Northern Iron Ore has been 21,700 shares per day over the past 30 days. Great Northern Iron Ore has a market cap of $111.9 million and is part of the metals & mining industry. Shares are up 11% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Great Northern Iron Ore 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, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • GNI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, GNI has a quick ratio of 1.65, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for GREAT NORTHERN IRON ORE PPTY is currently very high, coming in at 77.70%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, GNI's net profit margin of 77.69% significantly outperformed against the industry.
  • The revenue fell significantly faster than the industry average of 4.6%. Since the same quarter one year prior, revenues fell by 44.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income has significantly decreased by 51.0% when compared to the same quarter one year ago, falling from $7.24 million to $3.55 million.
  • 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 Metals & Mining industry and the overall market, GREAT NORTHERN IRON ORE PPTY's return on equity significantly exceeds that of both the industry average and the S&P 500.

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.

Crestwood Midstream Partners

Dividend Yield: 8.60%

Crestwood Midstream Partners (NYSE: CMLP) shares currently have a dividend yield of 8.60%.

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 64.46. Currently there are 5 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 221,700 shares per day over the past 30 days. Crestwood Midstream Partners has a market cap of $983.0 million and is part of the energy industry. Shares are up 10.8% year to date as of the close of trading on Thursday.

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 20.23%.
  • 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 1.7%. 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.

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.

Natural Resources Partners L.P

Dividend Yield: 9.40%

Natural Resources Partners L.P (NYSE: NRP) shares currently have a dividend yield of 9.40%.

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 11.88. 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 330,400 shares per day over the past 30 days. Natural Resources Partners L.P has a market cap of $2.6 billion and is part of the metals & mining industry. Shares are up 26.2% year to date as of the close of trading on Thursday.

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:
  • The revenue growth came in higher than the industry average of 1.7%. Since the same quarter one year prior, revenues slightly increased by 10.0%. 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 455.6% when compared to the same quarter one year prior, rising from -$16.90 million to $60.11 million.
  • The gross profit margin for NATURAL RESOURCE PARTNERS LP is currently very high, coming in at 95.10%. Regardless of NRP's high profit margin, it has managed to decrease 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 $0.50 in the prior year. For the next year, the market is expecting a contraction of 14.7% in earnings ($1.68 versus $1.97).

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.

Exterran Partners L.P

Dividend Yield: 7.80%

Exterran Partners L.P (NASDAQ: EXLP) shares currently have a dividend yield of 7.80%.

Exterran Partners, L.P., together with its subsidiaries, provides natural gas contract operations services to customers in the United States. The company has a P/E ratio of 187.64. Currently there are 3 analysts that rate Exterran Partners L.P a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Exterran Partners L.P has been 200,900 shares per day over the past 30 days. Exterran Partners L.P has a market cap of $1.1 billion and is part of the energy industry. Shares are up 29.6% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Exterran Partners L.P 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, expanding profit margins and good cash flow from operations. We feel these 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 came in higher than the industry average of 7.8%. Since the same quarter one year prior, revenues rose by 22.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • EXTERRAN 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. We feel that this trend should continue. During the past fiscal year, EXTERRAN PARTNERS LP increased its bottom line by earning $0.14 versus $0.07 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $0.14).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 225.0% when compared to the same quarter one year prior, rising from $4.52 million to $14.67 million.
  • 43.90% is the gross profit margin for EXTERRAN PARTNERS LP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.34% is above that of the industry average.
  • Net operating cash flow has significantly increased by 72.95% to $45.61 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 28.63%.

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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