5 Buy-Rated Dividend Stocks: WMB, MIC, OHI, TCP, MPW

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."

Williams Companies

Dividend Yield: 4.20%

Williams Companies (NYSE: WMB) shares currently have a dividend yield of 4.20%.

The Williams Companies, Inc. operates as an energy infrastructure company. The company has a P/E ratio of 36.60.

The average volume for Williams Companies has been 7,149,700 shares per day over the past 30 days. Williams Companies has a market cap of $22.7 billion and is part of the energy industry. Shares are up 2.7% year to date as of the close of trading on Monday.

TheStreet Ratings rates Williams Companies 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 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:
  • Net operating cash flow has increased to $495.00 million or 14.05% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -25.53%.
  • 42.00% is the gross profit margin for WILLIAMS COS 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 8.89% trails the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.6%. Since the same quarter one year prior, revenues fell by 10.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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. Looking ahead, the stock's 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 the other strengths this company displays justify these higher price levels.
  • WILLIAMS COS INC's earnings per share declined by 48.9% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, WILLIAMS COS INC reported lower earnings of $1.16 versus $1.35 in the prior year. For the next year, the market is expecting a contraction of 33.6% in earnings ($0.77 versus $1.16).

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 494.82.

The average volume for Macquarie Infrastructure Company has been 338,000 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 18.5% year to date as of the close of trading on Monday.

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 5.07%.
  • 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 60.30%, 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 1.8%. 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.

Omega Healthcare Investors

Dividend Yield: 5.70%

Omega Healthcare Investors (NYSE: OHI) shares currently have a dividend yield of 5.70%.

Omega Healthcare Investors, Inc. operates as a real estate investment trust (REIT) in the United States. The company invests in healthcare facilities, principally long-term healthcare facilities in the United States. The company has a P/E ratio of 26.63.

The average volume for Omega Healthcare Investors has been 1,552,900 shares per day over the past 30 days. Omega Healthcare Investors has a market cap of $3.7 billion and is part of the real estate industry. Shares are up 35.6% year to date as of the close of trading on Monday.

TheStreet Ratings rates Omega Healthcare Investors as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. 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:
  • OHI's revenue growth has slightly outpaced the industry average of 12.0%. Since the same quarter one year prior, revenues rose by 20.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Powered by its strong earnings growth of 36.00% and other important driving factors, this stock has surged by 50.87% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, OHI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • OMEGA HEALTHCARE INVS INC has improved earnings per share by 36.0% 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, OMEGA HEALTHCARE INVS INC increased its bottom line by earning $1.11 versus $0.46 in the prior year. This year, the market expects an improvement in earnings ($1.35 versus $1.11).
  • 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 46.1% when compared to the same quarter one year prior, rising from $26.08 million to $38.12 million.
  • The gross profit margin for OMEGA HEALTHCARE INVS INC is rather high; currently it is at 63.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 37.45% is above that of the industry average.

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

TC Pipelines

Dividend Yield: 7.10%

TC Pipelines (NYSE: TCP) shares currently have a dividend yield of 7.10%.

TC PipeLines, LP transports natural gas to market hubs and consuming markets primarily in the western and midwestern United States, and central Canada. The company has a P/E ratio of 19.07.

The average volume for TC Pipelines has been 258,800 shares per day over the past 30 days. TC Pipelines has a market cap of $2.8 billion and is part of the energy industry. Shares are up 10.2% year to date as of the close of trading on Monday.

TheStreet Ratings rates TC Pipelines as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, 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:
  • The revenue growth came in higher than the industry average of 10.6%. Since the same quarter one year prior, revenues slightly increased by 6.3%. 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 gross profit margin for TC PIPELINES LP is currently very high, coming in at 76.50%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 170.58% significantly outperformed against 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.
  • Despite currently having a low debt-to-equity ratio of 0.53, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that TCP's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.69 is low and demonstrates weak liquidity.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TC PIPELINES LP's return on equity is significantly below that of the industry average and is below that of 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.

Medical Properties

Dividend Yield: 5.40%

Medical Properties (NYSE: MPW) shares currently have a dividend yield of 5.40%.

Medical Properties Trust, Inc. operates as a real estate investment trust (REIT) in the United States. It acquires, develops, and invests in healthcare facilities; and leases healthcare facilities to healthcare operating companies and healthcare providers. The company has a P/E ratio of 22.09.

The average volume for Medical Properties has been 1,781,500 shares per day over the past 30 days. Medical Properties has a market cap of $2.2 billion and is part of the real estate industry. Shares are up 24.9% year to date as of the close of trading on Monday.

TheStreet Ratings rates Medical Properties as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. 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:
  • The revenue growth greatly exceeded the industry average of 12.0%. Since the same quarter one year prior, revenues rose by 42.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 157.14% and other important driving factors, this stock has surged by 69.30% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • MEDICAL PROPERTIES TRUST 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, MEDICAL PROPERTIES TRUST increased its bottom line by earning $0.56 versus $0.13 in the prior year. This year, the market expects an improvement in earnings ($0.83 versus $0.56).
  • 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 147.6% when compared to the same quarter one year prior, rising from $10.56 million to $26.16 million.
  • The gross profit margin for MEDICAL PROPERTIES TRUST is currently very high, coming in at 71.00%. It has increased significantly from the same period last year. Along with this, the net profit margin of 44.38% significantly outperformed against the industry average.

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

Will Inflation Set Stocks' Hearts Aflutter or Be a Poison Arrow? -- Market Recon

Will Inflation Set Stocks' Hearts Aflutter or Be a Poison Arrow? -- Market Recon

Energize Your Portfolio With 12 Stock Picks in Oil, Gas and Drilling Services

Energize Your Portfolio With 12 Stock Picks in Oil, Gas and Drilling Services

Williams Cos. Train Is Leaving the Station

Williams Cos. Train Is Leaving the Station

Jim Cramer: How to Play the Energy Sector in 2018

Jim Cramer: How to Play the Energy Sector in 2018

Why Some Think It's 'Prime Time' for Amazon to Enter the Pharmacy Market

Why Some Think It's 'Prime Time' for Amazon to Enter the Pharmacy Market