4 Buy-Rated Dividend Stocks: SLRC, CLCT, TNH, NMFC

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."

Solar Capital

Dividend Yield: 10.50%

Solar Capital (NASDAQ: SLRC) shares currently have a dividend yield of 10.50%.

Solar Capital Ltd. is a business development company specializing in investments in leveraged middle market companies. The company has a P/E ratio of 8.67

The average volume for Solar Capital has been 316,900 shares per day over the past 30 days Solar Capital has a market cap of $1.0 billion and is part of the financial services industry Shares are down 2.5% year to date as of the close of trading on Thursday

TheStreet Ratings rates Solar Capital as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, increase in stock price during the past year 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:
  • The revenue growth greatly exceeded the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 26.9%. 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 SOLAR CAPITAL LTD is rather high; currently it is at 65.80%. Regardless of SLRC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SLRC's net profit margin of 77.67% significantly outperformed against the industry.
  • 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 Capital Markets industry and the overall market, SOLAR CAPITAL LTD's return on equity is below that of both the industry average and the S&P 500.
  • In its most recent trading session, SLRC 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.
  • SOLAR CAPITAL LTD's earnings per share declined by 35.7% 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, SOLAR CAPITAL LTD increased its bottom line by earning $3.12 versus $1.69 in the prior year. For the next year, the market is expecting a contraction of 24.0% in earnings ($2.37 versus $3.12).

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

Collectors Universe

Dividend Yield: 10.10%

Collectors Universe (NASDAQ: CLCT) shares currently have a dividend yield of 10.10%.

Collectors Universe, Inc. provides authentication and grading services to dealers and collectors of high-value coins, trading cards, event tickets, autographs, memorabilia, and stamps in the United States. The company has a P/E ratio of 17.05

The average volume for Collectors Universe has been 40,200 shares per day over the past 30 days Collectors Universe has a market cap of $109.3 million and is part of the diversified services industry Shares are up 28.3% year to date as of the close of trading on Thursday

TheStreet Ratings rates Collectors Universe as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • CLCT's revenue growth trails the industry average of 24.7%. Since the same quarter one year prior, revenues rose by 10.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CLCT 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. To add to this, CLCT has a quick ratio of 1.95, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Diversified Consumer Services industry and the overall market, COLLECTORS UNIVERSE INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for COLLECTORS UNIVERSE INC is rather high; currently it is at 66.10%. 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 16.42% trails the industry average.
  • COLLECTORS UNIVERSE INC has improved earnings per share by 31.8% 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 year. During the past fiscal year, COLLECTORS UNIVERSE INC increased its bottom line by earning $0.86 versus $0.64 in the prior year.

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

Terra Nitrogen Company L.P

Dividend Yield: 8.90%

Terra Nitrogen Company L.P (NYSE: TNH) shares currently have a dividend yield of 8.90%.

Terra Nitrogen Company, L.P. engages in the production and sale of nitrogen fertilizer products. It primarily offers anhydrous ammonia and urea ammonium nitrate solutions. Terra Nitrogen GP Inc. serves as the general partner of the company. Terra Nitrogen Company, L.P. The company has a P/E ratio of 11.24

The average volume for Terra Nitrogen Company L.P has been 18,500 shares per day over the past 30 days Terra Nitrogen Company L.P has a market cap of $3.9 billion and is part of the chemicals industry Shares are down 0.9% year to date as of the close of trading on Thursday

TheStreet Ratings rates Terra Nitrogen Company L.P as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.7%. Since the same quarter one year prior, revenues rose by 13.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TNH 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. To add to this, TNH has a quick ratio of 2.25, which demonstrates the ability of the company to cover short-term liquidity needs.
  • TERRA NITROGEN CO -LP has improved earnings per share by 31.7% 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. During the past fiscal year, TERRA NITROGEN CO -LP increased its bottom line by earning $17.06 versus $15.33 in the prior year.
  • The gross profit margin for TERRA NITROGEN CO -LP is currently very high, coming in at 78.50%. It has increased significantly from the same period last year. Along with this, the net profit margin of 74.43% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $170.10 million or 23.35% when compared to the same quarter last year. In addition, TERRA NITROGEN CO -LP has also vastly surpassed the industry average cash flow growth rate of -30.83%.

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

New Mountain Finance

Dividend Yield: 9.70%

New Mountain Finance (NYSE: NMFC) shares currently have a dividend yield of 9.70%.

New Mountain Finance Corporation operates as a closed-end, non-diversified management investment company. The company has a P/E ratio of 6.81

The average volume for New Mountain Finance has been 411,900 shares per day over the past 30 days New Mountain Finance has a market cap of $525.9 million and is part of the financial services industry Shares are down 4.2% year to date as of the close of trading on Thursday

TheStreet Ratings rates New Mountain Finance as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, expanding profit margins, notable return on equity and increase in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

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 33.1%. 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 -$15.76 million or 47.66% when compared to the same quarter last year. In addition, NEW MOUNTAIN FINANCE CORP has also vastly surpassed the industry average cash flow growth rate of -303.26%.
  • The gross profit margin for NEW MOUNTAIN FINANCE CORP is rather high; currently it is at 58.10%. Regardless of NMFC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NMFC's net profit margin of 97.01% significantly outperformed against the industry.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Capital Markets industry average. The net income increased by 3.8% when compared to the same quarter one year prior, going from $23.67 million to $24.56 million.
  • 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 Capital Markets industry and the overall market on the basis of return on equity, NEW MOUNTAIN FINANCE CORP has outperformed in comparison with the industry average, but has underperformed when compared to 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.

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