5 Buy-Rated Dividend Stocks: ED, PDM, ACMP, MIC, PPL

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."

Consolidated Edison

Dividend Yield: 4.30%

Consolidated Edison (NYSE: ED) shares currently have a dividend yield of 4.30%.

Consolidated Edison, Inc., through its subsidiaries, engages in regulated electric, gas, and steam delivery businesses. The company has a P/E ratio of 16.16.

The average volume for Consolidated Edison has been 1,547,400 shares per day over the past 30 days. Consolidated Edison has a market cap of $16.9 billion and is part of the utilities industry. Shares are up 2.8% year to date as of the close of trading on Friday.

TheStreet Ratings rates Consolidated Edison as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels 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:
  • ED's revenue growth has slightly outpaced the industry average of 0.0%. Since the same quarter one year prior, revenues slightly increased by 3.4%. 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.
  • 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 Multi-Utilities industry and the overall market on the basis of return on equity, CONSOLIDATED EDISON INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • CONSOLIDATED EDISON INC's earnings per share declined by 30.9% 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, CONSOLIDATED EDISON INC increased its bottom line by earning $3.86 versus $3.57 in the prior year. For the next year, the market is expecting a contraction of 1.6% in earnings ($3.80 versus $3.86).
  • Even though the current debt-to-equity ratio is 1.01, it is still below the industry average, suggesting that this level of debt is acceptable within the Multi-Utilities industry. Despite the fact that ED's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.52 is low and demonstrates weak liquidity.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

Piedmont Office Realty

Dividend Yield: 4.20%

Piedmont Office Realty (NYSE: PDM) shares currently have a dividend yield of 4.20%.

Piedmont Office Realty Trust, Inc. engages in the acquisition and ownership of commercial real estate properties in the United States. Its property portfolio primarily consists of office and industrial buildings, warehouses, and manufacturing facilities. The company has a P/E ratio of 48.00.

The average volume for Piedmont Office Realty has been 1,088,700 shares per day over the past 30 days. Piedmont Office Realty has a market cap of $3.2 billion and is part of the real estate industry. Shares are up 5.2% year to date as of the close of trading on Friday.

TheStreet Ratings rates Piedmont Office Realty as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • PDM's revenue growth trails the industry average of 12.0%. Since the same quarter one year prior, revenues slightly increased by 1.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $43.00 million or 13.42% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -16.08%.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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.
  • PIEDMONT OFFICE REALTY TRUST has improved earnings per share by 18.2% 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, PIEDMONT OFFICE REALTY TRUST reported lower earnings of $0.37 versus $0.49 in the prior year. This year, the market expects an improvement in earnings ($0.43 versus $0.37).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

Access Midstream Partners

Dividend Yield: 4.30%

Access Midstream Partners (NYSE: ACMP) shares currently have a dividend yield of 4.30%.

Access Midstream Partners, L.P. owns, operates, develops, and acquires natural gas, natural gas liquids and oil gathering systems, and other midstream energy assets in the United States. It focuses on natural gas and natural gas liquids gathering operations. The company has a P/E ratio of 48.31.

The average volume for Access Midstream Partners has been 561,300 shares per day over the past 30 days. Access Midstream Partners has a market cap of $4.7 billion and is part of the energy industry. Shares are up 31.1% year to date as of the close of trading on Friday.

TheStreet Ratings rates Access Midstream Partners as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • ACMP's very impressive revenue growth greatly exceeded the industry average of 10.6%. Since the same quarter one year prior, revenues leaped by 53.2%. 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.
  • 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 13.7% when compared to the same quarter one year prior, going from $52.37 million to $59.54 million.
  • Net operating cash flow has increased to $80.13 million or 19.21% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -25.50%.
  • The gross profit margin for ACCESS MIDSTREAM PARTNERS LP is rather high; currently it is at 65.10%. Regardless of ACMP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ACMP's net profit margin of 25.12% significantly outperformed against the industry.
  • Compared to its closing price of one year ago, ACMP's share price has jumped by 75.34%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

Macquarie Infrastructure Company

Dividend Yield: 5.10%

Macquarie Infrastructure Company (NYSE: MIC) shares currently have a dividend yield of 5.10%.

Macquarie Infrastructure Company LLC, through its subsidiaries, owns, operates, and invests in a diversified group of infrastructure businesses in the United States. The company has a P/E ratio of 491.09.

The average volume for Macquarie Infrastructure Company has been 336,000 shares per day over the past 30 days. Macquarie Infrastructure Company has a market cap of $2.6 billion and is part of the wholesale industry. Shares are up 19.6% year to date as of the close of trading on Friday.

TheStreet Ratings rates Macquarie Infrastructure Company 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 solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $33.67 million or 41.88% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 4.23%.
  • 40.30% is the gross profit margin for MACQUARIE INFRASTRUCT CO LLC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MIC's net profit margin of 2.22% significantly trails the industry average.
  • Compared to its closing price of one year ago, MIC's share price has jumped by 61.30%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 1.3%. Since the same quarter one year prior, revenues slightly dropped by 0.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • MACQUARIE INFRASTRUCT CO LLC 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, MACQUARIE INFRASTRUCT CO LLC reported lower earnings of $0.29 versus $0.59 in the prior year. This year, the market expects an improvement in earnings ($1.55 versus $0.29).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

PPL

Dividend Yield: 4.90%

PPL (NYSE: PPL) shares currently have a dividend yield of 4.90%.

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 12.83.

The average volume for PPL has been 4,766,000 shares per day over the past 30 days. PPL has a market cap of $17.7 billion and is part of the utilities industry. Shares are up 3.7% year to date as of the close of trading on Friday.

TheStreet Ratings rates PPL as a buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, increase in stock price during the past year, attractive valuation levels 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:
  • 39.90% is the gross profit margin for PPL CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.80% is above that of 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 revenue fell significantly faster than the industry average of 12.6%. Since the same quarter one year prior, revenues fell by 40.2%. 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 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.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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.
null

If you liked this article you might like

Maybe This Is Not Really About Inflation -- Market Recon

Maybe This Is Not Really About Inflation -- Market Recon

Duke Energy, Dominion, AT&T: 'Mad Money' Lightning Round

Duke Energy, Dominion, AT&T: 'Mad Money' Lightning Round

Buy Gradually on the Way Down: Cramer's 'Mad Money' Recap (Tuesday 1/30/18)

Buy Gradually on the Way Down: Cramer's 'Mad Money' Recap (Tuesday 1/30/18)

Splunk, Southern Company, LAM Research: 'Mad Money' Lightning Round

Splunk, Southern Company, LAM Research: 'Mad Money' Lightning Round

Don't Miss This Chance to Buy: Cramer's 'Mad Money' Recap (Monday 1/22/18)

Don't Miss This Chance to Buy: Cramer's 'Mad Money' Recap (Monday 1/22/18)