4 Buy-Rated Dividend Stocks: ARI, GNI, TCRD, INTX

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 4 stocks with substantial yields, that ultimately, we have rated "Buy."

Apollo Commercial Real Estate Finance

Dividend Yield: 10.10%

Apollo Commercial Real Estate Finance (NYSE: ARI) shares currently have a dividend yield of 10.10%.

Apollo Commercial Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. The company has a P/E ratio of 10.29.

The average volume for Apollo Commercial Real Estate Finance has been 420,600 shares per day over the past 30 days. Apollo Commercial Real Estate Finance has a market cap of $584.6 million and is part of the real estate industry. Shares are down 0.1% year to date as of the close of trading on Friday.

TheStreet Ratings rates Apollo Commercial Real Estate Finance as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations and compelling growth in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 25.7%. 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 APOLLO COMMERCIAL RE FIN INC is currently very high, coming in at 77.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 65.79% significantly outperformed against the industry average.
  • Net operating cash flow has slightly increased to $11.92 million or 1.29% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -16.12%.
  • 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 31.2% when compared to the same quarter one year prior, rising from $9.09 million to $11.93 million.
  • APOLLO COMMERCIAL RE FIN INC's earnings per share declined by 23.3% 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, APOLLO COMMERCIAL RE FIN INC increased its bottom line by earning $1.68 versus $1.34 in the prior year. For the next year, the market is expecting a contraction of 7.7% in earnings ($1.55 versus $1.68).

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

Great Northern Iron Ore

Dividend Yield: 13.70%

Great Northern Iron Ore (NYSE: GNI) shares currently have a dividend yield of 13.70%.

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 6.15.

The average volume for Great Northern Iron Ore has been 15,600 shares per day over the past 30 days. Great Northern Iron Ore has a market cap of $109.4 million and is part of the metals & mining industry. Shares are up 7.7% year to date as of the close of trading on Friday.

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. Along with this, the company maintains a quick ratio of 2.93, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for GREAT NORTHERN IRON ORE PPTY is currently very high, coming in at 78.00%. Regardless of GNI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GNI's net profit margin of 77.96% significantly outperformed against the industry.
  • The revenue fell significantly faster than the industry average of 1.5%. Since the same quarter one year prior, revenues fell by 32.7%. 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 38.2% when compared to the same quarter one year ago, falling from $5.97 million to $3.69 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. 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.

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

THL Credit

Dividend Yield: 9.10%

THL Credit (NASDAQ: TCRD) shares currently have a dividend yield of 9.10%.

THL Credit, Inc. is a business development company specializing in investments in debt and equity securities of middle market companies. The company has a P/E ratio of 11.03.

The average volume for THL Credit has been 412,600 shares per day over the past 30 days. THL Credit has a market cap of $391.8 million and is part of the financial services industry. Shares are up 2% year to date as of the close of trading on Friday.

TheStreet Ratings rates THL Credit as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in stock price during the past year, growth in earnings per share, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 34.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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.
  • THL CREDIT INC has improved earnings per share by 17.9% 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, THL CREDIT INC increased its bottom line by earning $1.26 versus $1.19 in the prior year. This year, the market expects an improvement in earnings ($1.41 versus $1.26).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 51.0% when compared to the same quarter one year prior, rising from $5.71 million to $8.61 million.
  • The gross profit margin for THL CREDIT INC is rather high; currently it is at 62.40%. Regardless of TCRD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TCRD's net profit margin of 59.72% significantly outperformed against the industry.

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

Intersections

Dividend Yield: 9.10%

Intersections (NASDAQ: INTX) shares currently have a dividend yield of 9.10%.

Intersections Inc. provides consumer identity risk management services in the United States. Its services help consumers understand and monitor their credit profiles and other personal information, and protect themselves against identity theft or fraud. The company has a P/E ratio of 10.58.

The average volume for Intersections has been 83,600 shares per day over the past 30 days. Intersections has a market cap of $158.1 million and is part of the diversified services industry. Shares are down 7.4% year to date as of the close of trading on Friday.

TheStreet Ratings rates Intersections 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, reasonable valuation levels, 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:
  • INTX's debt-to-equity ratio is very low at 0.02 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 1.48, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for INTERSECTIONS INC is rather high; currently it is at 66.80%. Regardless of INTX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.69% trails the industry average.
  • INTERSECTIONS INC 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. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, INTERSECTIONS INC increased its bottom line by earning $1.05 versus $0.97 in the prior year.
  • INTX, with its decline in revenue, slightly underperformed the industry average of 9.1%. Since the same quarter one year prior, revenues slightly dropped by 9.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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

Don't Get Caught Out in the Cold: Cramer's 'Mad Money' Recap (Friday 1/5/18)

Don't Get Caught Out in the Cold: Cramer's 'Mad Money' Recap (Friday 1/5/18)

Magellan Midstream Partners, Xilinx, B&G Foods: 'Mad Money' Lightning Round

Magellan Midstream Partners, Xilinx, B&G Foods: 'Mad Money' Lightning Round

Some Divine Investing Ideas From Apollo Global Management

Some Divine Investing Ideas From Apollo Global Management

Making a Pitch for Real Estate Winners

Making a Pitch for Real Estate Winners

It's a Good Time to Own (but Not Buy) Real Estate

It's a Good Time to Own (but Not Buy) Real Estate