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."

Liberty Property

Dividend Yield: 4.50%

Liberty Property (NYSE: LRY) shares currently have a dividend yield of 4.50%.

Liberty Property Trust is a publicly owned real estate investment holding trust. Through its subsidiary, it provides leasing, property management, development, acquisition, and other tenant-related services for a portfolio of industrial and office properties. The company has a P/E ratio of 41.03.

The average volume for Liberty Property has been 891,700 shares per day over the past 30 days. Liberty Property has a market cap of $5.0 billion and is part of the real estate industry. Shares are up 17.9% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Liberty Property as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, revenue growth, reasonable valuation levels and growth in earnings per share. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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 net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry average. The net income increased by 10.4% when compared to the same quarter one year prior, going from $34.79 million to $38.43 million.
  • LRY's revenue growth trails the industry average of 16.4%. Since the same quarter one year prior, revenues slightly increased by 4.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • LIBERTY PROPERTY TRUST'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, LIBERTY PROPERTY TRUST increased its bottom line by earning $1.05 versus $0.99 in the prior year. This year, the market expects an improvement in earnings ($1.10 versus $1.05).

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National Retail Properties

Dividend Yield: 4.10%

National Retail Properties (NYSE: NNN) shares currently have a dividend yield of 4.10%.

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 39.35.

The average volume for National Retail Properties has been 1,036,200 shares per day over the past 30 days. National Retail Properties has a market cap of $4.5 billion and is part of the real estate industry. Shares are up 25.9% 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 the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

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 37.45% 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 ($1.16 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.

Integrys Energy Group

Dividend Yield: 4.50%

Integrys Energy Group (NYSE: TEG) shares currently have a dividend yield of 4.50%.

Integrys Energy Group, Inc., a diversified energy holding company, engages in natural gas and electric utility operations, and non regulated energy operations in the United States and Canada. The company has a P/E ratio of 16.64.

The average volume for Integrys Energy Group has been 323,100 shares per day over the past 30 days. Integrys Energy Group has a market cap of $4.8 billion and is part of the utilities industry. Shares are up 16.6% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Integrys Energy Group as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, compelling growth in net income, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • TEG's revenue growth has slightly outpaced the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 6.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over 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 Multi-Utilities industry. The net income increased by 74.2% when compared to the same quarter one year prior, rising from $39.50 million to $68.80 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.89, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.29 is very weak and demonstrates a lack of ability to pay short-term obligations.

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.

Buckeye Partners L.P

Dividend Yield: 6.60%

Buckeye Partners L.P (NYSE: BPL) shares currently have a dividend yield of 6.60%.

Buckeye Partners, L.P. owns and operates refined petroleum products pipeline systems in the United States. Its Pipelines & Terminals segment transports refined petroleum products; and provides bulk storage and terminal throughput services in the continental United States. The company has a P/E ratio of 27.05.

The average volume for Buckeye Partners L.P has been 467,400 shares per day over the past 30 days. Buckeye Partners L.P has a market cap of $6.1 billion and is part of the energy industry. Shares are up 38.1% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Buckeye Partners L.P as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year and notable return on equity. 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 where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • BUCKEYE PARTNERS LP's earnings per share declined by 45.3% 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, BUCKEYE PARTNERS LP increased its bottom line by earning $2.31 versus $1.25 in the prior year. This year, the market expects an improvement in earnings ($3.28 versus $2.31).
  • BPL, with its decline in revenue, underperformed when compared the industry average of 1.3%. Since the same quarter one year prior, revenues fell by 12.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, BUCKEYE PARTNERS LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for BUCKEYE PARTNERS LP is rather low; currently it is at 15.90%. Regardless of BPL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.04% trails the industry average.

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.

PPL

Dividend Yield: 4.50%

PPL (NYSE: PPL) shares currently have a dividend yield of 4.50%.

PPL Corporation, an energy and utility holding company, engages in the generation, transmission, distribution, and sale of electricity to wholesale and retail customers in the United States and the United Kingdom. The company operates in four segments: Kentucky Regulated, U.K. The company has a P/E ratio of 12.57.

The average volume for PPL has been 4,178,600 shares per day over the past 30 days. PPL has a market cap of $19.1 billion and is part of the utilities industry. Shares are up 14.7% year to date as of the close of trading on Thursday.

TheStreet Ratings rates PPL as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and solid stock price performance. 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:
  • 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. Compared to other companies in the Electric Utilities industry and the overall market, PPL CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has slightly increased to $670.00 million or 1.36% when compared to the same quarter last year. Despite an increase in cash flow, PPL CORP's average is still marginally south of the industry average growth rate of 4.97%.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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 revenue fell significantly faster than the industry average of 13.2%. Since the same quarter one year prior, revenues fell by 25.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for PPL CORP is currently lower than what is desirable, coming in at 32.50%. Regardless of PPL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PPL's net profit margin of 11.48% compares favorably to the industry average.

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.

Other helpful dividend tools from TheStreet:

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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