5 Buy-Rated Dividend Stocks: LO, HCP, SO, GLNG, PBCT

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."

Lorillard

Dividend Yield: 5.00%

Lorillard (NYSE: LO) shares currently have a dividend yield of 5.00%.

Lorillard, Inc. manufactures and sells cigarettes in the United States. The company operates through two segments, Cigarettes and Electronic Cigarettes. The Cigarettes segment manufactures and sells cigarettes. The company has a P/E ratio of 14.17

The average volume for Lorillard has been 3,117,300 shares per day over the past 30 days Lorillard has a market cap of $16.5 billion and is part of the tobacco industry Shares are up 12.1% year to date as of the close of trading on Thursday

TheStreet Ratings rates Lorillard as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, increase in net income, revenue growth, expanding profit margins and good cash flow from operations. 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:
  • LORILLARD INC 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, LORILLARD INC increased its bottom line by earning $2.81 versus $2.67 in the prior year. This year, the market expects an improvement in earnings ($3.11 versus $2.81).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Tobacco industry average. The net income increased by 47.1% when compared to the same quarter one year prior, rising from $223.00 million to $328.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 5.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for LORILLARD INC is rather high; currently it is at 64.50%. It has increased significantly from the same period last year. Along with this, the net profit margin of 29.23% is above that of the industry average.
  • Net operating cash flow has slightly increased to $699.00 million or 1.30% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -23.89%.

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

HCP

Dividend Yield: 4.60%

HCP (NYSE: HCP) shares currently have a dividend yield of 4.60%.

HCP, Inc. is an independent hybrid real estate investment trust. The fund invests in real estate markets of the United States. The company has a P/E ratio of 23.95

The average volume for HCP has been 3,007,500 shares per day over the past 30 days HCP has a market cap of $20.5 billion and is part of the real estate industry Shares are up 1.2% year to date as of the close of trading on Thursday

TheStreet Ratings rates HCP as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • HCP's revenue growth has slightly outpaced the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 13.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HCP INC has improved earnings per share by 21.4% 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, HCP INC increased its bottom line by earning $1.83 versus $1.27 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.83).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Real Estate Investment Trusts (REITs) industry average. The net income increased by 19.2% when compared to the same quarter one year prior, going from $193.38 million to $230.59 million.
  • Net operating cash flow has increased to $214.35 million or 14.95% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -16.12%.
  • The gross profit margin for HCP INC is rather high; currently it is at 62.50%. Regardless of HCP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HCP's net profit margin of 43.41% 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.

Southern

Dividend Yield: 4.60%

Southern (NYSE: SO) shares currently have a dividend yield of 4.60%.

The Southern Company, together with its subsidiaries, operates as a public electric utility company. The company has a P/E ratio of 19.08

The average volume for Southern has been 4,449,000 shares per day over the past 30 days Southern has a market cap of $38.3 billion and is part of the utilities industry Shares are up 2.8% year to date as of the close of trading on Thursday

TheStreet Ratings rates Southern as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.8%. Since the same quarter one year prior, revenues slightly increased by 8.1%. 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.
  • Net operating cash flow has increased to $737.00 million or 29.75% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 17.17%.
  • SOUTHERN CO 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 reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SOUTHERN CO increased its bottom line by earning $2.67 versus $2.55 in the prior year. This year, the market expects an improvement in earnings ($2.75 versus $2.67).
  • The gross profit margin for SOUTHERN CO is currently lower than what is desirable, coming in at 34.20%. Regardless of SO'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 2.48% trails the industry average.
  • The share price of SOUTHERN CO has not done very well: it is down 9.16% 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.

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

Golar LNG

Dividend Yield: 5.60%

Golar LNG (NASDAQ: GLNG) shares currently have a dividend yield of 5.60%.

Golar LNG Limited, a midstream liquefied natural gas (LNG) company, engages in the transportation, regasification and liquefaction, and trading of LNG. The company has a P/E ratio of 2.87

The average volume for Golar LNG has been 640,600 shares per day over the past 30 days Golar LNG has a market cap of $2.6 billion and is part of the transportation industry Shares are down 12.8% year to date as of the close of trading on Thursday

TheStreet Ratings rates Golar LNG as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 463.8% when compared to the same quarter one year prior, rising from $15.18 million to $85.56 million.
  • GLNG's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, GOLAR LNG LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for GOLAR LNG LTD is rather high; currently it is at 67.80%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 243.66% significantly outperformed against the industry average.
  • GOLAR LNG LTD 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, GOLAR LNG LTD increased its bottom line by earning $11.66 versus $0.61 in the prior year. For the next year, the market is expecting a contraction of 88.8% in earnings ($1.31 versus $11.66).

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

People's United Financial

Dividend Yield: 4.40%

People's United Financial (NASDAQ: PBCT) shares currently have a dividend yield of 4.40%.

People's United Financial, Inc. operates as the bank holding company for People's United Bank that provides commercial banking, retail and business banking, and wealth management services to individual, corporate, and municipal customers. The company has a P/E ratio of 19.51

The average volume for People's United Financial has been 3,822,300 shares per day over the past 30 days People's United Financial has a market cap of $4.9 billion and is part of the banking industry Shares are up 23.7% year to date as of the close of trading on Thursday

TheStreet Ratings rates People's United Financial as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, 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 where it was a year ago today, the stock is now trading at a higher level, regardless of 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.
  • PEOPLE'S UNITED FINL INC's earnings per share declined by 5.9% 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, PEOPLE'S UNITED FINL INC increased its bottom line by earning $0.72 versus $0.57 in the prior year. This year, the market expects an improvement in earnings ($0.77 versus $0.72).
  • The revenue fell significantly faster than the industry average of 40.0%. Since the same quarter one year prior, revenues slightly dropped by 0.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for PEOPLE'S UNITED FINL INC is currently very high, coming in at 87.40%. Regardless of PBCT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PBCT's net profit margin of 15.83% is significantly lower than the industry average.
  • 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. When compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, PEOPLE'S UNITED FINL INC's return on equity is below 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.

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