5 Buy-Rated Dividend Stocks: WMB, SIX, APL, NGLS, WPC

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: 4.30%

Williams Companies (NYSE: WMB) shares currently have a dividend yield of 4.30%.

The Williams Companies, Inc. operates as an energy infrastructure company. The company has a P/E ratio of 37.03

The average volume for Williams Companies has been 7,486,600 shares per day over the past 30 days Williams Companies has a market cap of $22.2 billion and is part of the energy industry Shares are down 0.8% year to date as of the close of trading on Friday

TheStreet Ratings rates Williams Companies as a buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations 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:
  • 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. Along with this, the net profit margin of 8.89% is above that of the industry average.
  • 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 -24.27%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 13.3%. 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.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, WILLIAMS COS INC 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.

Six Flags Entertainment

Dividend Yield: 5.10%

Six Flags Entertainment (NYSE: SIX) shares currently have a dividend yield of 5.10%.

Six Flags Entertainment Corporation owns and operates regional theme, water, and zoological parks. The company's parks offer various state-of-the-art and traditional thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues, and retail outlets. The company has a P/E ratio of 10.47

The average volume for Six Flags Entertainment has been 815,600 shares per day over the past 30 days Six Flags Entertainment has a market cap of $3.4 billion and is part of the leisure industry Shares are up 14.9% year to date as of the close of trading on Friday

TheStreet Ratings rates Six Flags Entertainment as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, solid stock price performance, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.6%. Since the same quarter one year prior, revenues rose by 31.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 41.70% and other important driving factors, this stock has surged by 33.91% 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.
  • 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 Hotels, Restaurants & Leisure industry and the overall market, SIX FLAGS ENTERTAINMENT CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 45.7% when compared to the same quarter one year prior, rising from -$115.11 million to -$62.53 million.
  • Net operating cash flow has increased to -$36.94 million or 13.63% when compared to the same quarter last year. Despite an increase in cash flow, SIX FLAGS ENTERTAINMENT CORP's cash flow growth rate is still lower than the industry average growth rate of 34.75%.

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

Atlas Pipeline Partners

Dividend Yield: 6.10%

Atlas Pipeline Partners (NYSE: APL) shares currently have a dividend yield of 6.10%.

Atlas Pipeline Partners, L.P. operates in the gathering and processing segments of the midstream natural gas industry. The company operates in two segments, Gathering and Processing; and Transportation, Treating, and Other. The company has a P/E ratio of 94.29

The average volume for Atlas Pipeline Partners has been 766,100 shares per day over the past 30 days Atlas Pipeline Partners has a market cap of $3.0 billion and is part of the energy industry Shares are up 21% year to date as of the close of trading on Friday

TheStreet Ratings rates Atlas Pipeline Partners as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. 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 13.3%. Since the same quarter one year prior, revenues rose by 38.0%. 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.
  • Compared to its closing price of one year ago, APL's share price has jumped by 31.05%, 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.
  • ATLAS PIPELINE PARTNER LP 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, ATLAS PIPELINE PARTNER LP reported lower earnings of $0.97 versus $5.22 in the prior year. This year, the market expects an improvement in earnings ($1.78 versus $0.97).
  • APL's debt-to-equity ratio of 0.89 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.78 is weak.
  • Net operating cash flow has decreased to $35.26 million or 17.52% when compared to the same quarter last year. Despite a decrease in cash flow of 17.52%, ATLAS PIPELINE PARTNER LP is in line with the industry average cash flow growth rate of -24.27%.

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

Targa Resources Partners

Dividend Yield: 5.60%

Targa Resources Partners (NYSE: NGLS) shares currently have a dividend yield of 5.60%.

Targa Resources Partners LP provides midstream natural gas, natural gas liquid (NGL), terminaling, and crude oil gathering services in the United States. The company operates in two divisions, Gathering and Processing, and Logistics and Marketing. The company has a P/E ratio of 65.44

The average volume for Targa Resources Partners has been 426,800 shares per day over the past 30 days Targa Resources Partners has a market cap of $5.1 billion and is part of the energy industry Shares are up 35% year to date as of the close of trading on Friday

TheStreet Ratings rates Targa Resources Partners as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and solid stock price performance. 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 $171.70 million or 17.04% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.27%.
  • Compared to its closing price of one year ago, NGLS's share price has jumped by 39.20%, 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.
  • NGLS, with its decline in revenue, slightly underperformed the industry average of 13.3%. Since the same quarter one year prior, revenues fell by 15.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for TARGA RESOURCES PARTNERS LP is currently extremely low, coming in at 12.50%. Regardless of NGLS'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 2.78% trails the industry average.
  • The debt-to-equity ratio of 1.40 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, NGLS maintains a poor quick ratio of 0.82, which illustrates the inability to avoid short-term cash problems.

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

W. P. Carey

Dividend Yield: 5.00%

W. P. Carey (NYSE: WPC) shares currently have a dividend yield of 5.00%.

W. P. Carey Inc. is an independent equity real estate investment trust. The firm also provides long-term sale-leaseback and build-to-suit financing for companies. It invests in the real estate markets across the globe. The company has a P/E ratio of 63.32

The average volume for W. P. Carey has been 297,100 shares per day over the past 30 days W. P. Carey has a market cap of $4.6 billion and is part of the real estate industry Shares are up 26.9% year to date as of the close of trading on Friday

TheStreet Ratings rates W. P. Carey as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, increase in net income, good cash flow from operations 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:
  • WPC's very impressive revenue growth greatly exceeded the industry average of 7.7%. Since the same quarter one year prior, revenues leaped by 66.0%. 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.
  • Compared to its closing price of one year ago, WPC's share price has jumped by 47.88%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, WPC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 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 15.4% when compared to the same quarter one year prior, going from $12.29 million to $14.18 million.
  • Net operating cash flow has significantly increased by 530.41% to $17.48 million when compared to the same quarter last year. In addition, W P CAREY INC has also vastly surpassed the industry average cash flow growth rate of -0.16%.
  • The gross profit margin for W P CAREY INC is currently very high, coming in at 79.60%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, WPC's net profit margin of 12.50% significantly trails 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.

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