5 Buy-Rated Dividend Stocks: NYCB, DIN, PEG, VIV, WPZ

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."

New York Community Bancorp

Dividend Yield: 7.20%

New York Community Bancorp (NYSE: NYCB) shares currently have a dividend yield of 7.20%.

New York Community Bancorp, Inc. operates as a multi-bank holding company for New York Community Bank and New York Commercial Bank that offer banking products and financial services in New York, New Jersey, Florida, Ohio, and Arizona. The company has a P/E ratio of 11.10.

The average volume for New York Community Bancorp has been 2,973,200 shares per day over the past 30 days. New York Community Bancorp has a market cap of $6.1 billion and is part of the banking industry. Shares are up 6.3% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates New York Community Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins, increase in stock price during the past year, notable return on equity 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 gross profit margin for NEW YORK CMNTY BANCORP INC is rather high; currently it is at 69.90%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, NYCB's net profit margin of 24.30% significantly trails the industry average.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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 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 Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, NEW YORK CMNTY BANCORP INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The revenue fell significantly faster than the industry average of 40.6%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.

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DineEquity

Dividend Yield: 4.20%

DineEquity (NYSE: DIN) shares currently have a dividend yield of 4.20%.

DineEquity, Inc., through its subsidiaries, develops, franchises, and operates full-service restaurant chains in the United States and internationally. The company has a P/E ratio of 11.99.

The average volume for DineEquity has been 170,500 shares per day over the past 30 days. DineEquity has a market cap of $1.4 billion and is part of the leisure industry. Shares are up 6% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates DineEquity as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, reasonable valuation levels, good cash flow from operations, expanding profit margins 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 its closing price of one year ago, DIN's share price has jumped by 44.74%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, DIN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has significantly increased by 59.36% to $71.23 million when compared to the same quarter last year. In addition, DINEEQUITY INC has also vastly surpassed the industry average cash flow growth rate of -1.91%.
  • The gross profit margin for DINEEQUITY INC is rather high; currently it is at 61.40%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 11.17% trails the industry average.
  • The revenue fell significantly faster than the industry average of 3.1%. Since the same quarter one year prior, revenues fell by 33.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing 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.

Public Service Enterprise Group

Dividend Yield: 4.10%

Public Service Enterprise Group (NYSE: PEG) shares currently have a dividend yield of 4.10%.

Public Service Enterprise Group Incorporated, through its subsidiaries, operates as an energy company primarily in the northeastern and mid Atlantic United States. The company has a P/E ratio of 15.95.

The average volume for Public Service Enterprise Group has been 2,724,300 shares per day over the past 30 days. Public Service Enterprise Group has a market cap of $17.6 billion and is part of the utilities industry. Shares are up 13.6% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Public Service Enterprise Group 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 largely solid financial position with reasonable debt levels by most measures. 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:
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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 debt-to-equity ratio is somewhat low, currently at 0.76, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that PEG's debt-to-equity ratio is low, the quick ratio, which is currently 0.55, displays a potential problem in covering short-term cash needs.
  • PEG, with its decline in revenue, slightly underperformed the industry average of 1.7%. Since the same quarter one year prior, revenues slightly dropped by 3.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $877.00 million or 19.39% when compared to the same quarter last year. Despite a decrease in cash flow of 19.39%, PUBLIC SERVICE ENTRP GRP INC is in line with the industry average cash flow growth rate of -20.81%.
  • 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 Multi-Utilities industry and the overall market on the basis of return on equity, PUBLIC SERVICE ENTRP GRP INC has outperformed in comparison with the industry average, but has underperformed when compared to that of 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.

Telefonica Brasil S.A

Dividend Yield: 5.80%

Telefonica Brasil S.A (NYSE: VIV) shares currently have a dividend yield of 5.80%.

Telefonica Brasil S.A. provides fixed-line telecommunications services to residential and commercial customers in Brazil. The company has a P/E ratio of 6.48.

The average volume for Telefonica Brasil S.A has been 1,113,200 shares per day over the past 30 days. Telefonica Brasil S.A has a market cap of $29.8 billion and is part of the telecommunications industry. Shares are up 9.8% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Telefonica Brasil S.A 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, attractive valuation levels, expanding profit margins and increase in stock price during the past year. 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:
  • VIV's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.13, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for TELEFONICA BRASIL SA is currently very high, coming in at 85.20%. It has increased significantly from the same period last year. Along with this, the net profit margin of 16.67% is above that of the industry average.
  • VIV, with its decline in revenue, slightly underperformed the industry average of 3.3%. Since the same quarter one year prior, revenues slightly dropped by 6.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • In its most recent trading session, VIV 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.

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.

Williams Partners

Dividend Yield: 6.40%

Williams Partners (NYSE: WPZ) shares currently have a dividend yield of 6.40%.

Williams Partners L.P., an energy infrastructure company, focuses on connecting North America's hydrocarbon resource plays to growing markets for natural gas and natural gas liquids (NGL). It operates in two segments, Gas Pipeline and Midstream Gas & Liquids. The company has a P/E ratio of 34.18.

The average volume for Williams Partners has been 1,206,900 shares per day over the past 30 days. Williams Partners has a market cap of $21.8 billion and is part of the chemicals industry. Shares are up 7.1% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Williams Partners as a buy. Among the primary strengths of the company is its expanding profit margins over time. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • 40.60% is the gross profit margin for WILLIAMS 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 18.28% is above that of the industry average.
  • WPZ, with its decline in revenue, slightly underperformed the industry average of 8.8%. Since the same quarter one year prior, revenues fell by 10.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The share price of WILLIAMS PARTNERS LP has not done very well: it is down 6.86% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Despite the stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.
  • WILLIAMS PARTNERS LP's earnings per share declined by 41.2% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, WILLIAMS PARTNERS LP reported lower earnings of $1.94 versus $3.68 in the prior year. For the next year, the market is expecting a contraction of 8.5% in earnings ($1.78 versus $1.94).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has decreased by 21.3% when compared to the same quarter one year ago, dropping from $408.00 million to $321.00 million.

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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