5 Buy-Rated Dividend Stocks: STWD, SLF, SNH, HIMX, PSE

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."

Starwood Property

Dividend Yield: 7.40%

Starwood Property (NYSE: STWD) shares currently have a dividend yield of 7.40%.

Starwood Property Trust, Inc. engages in originating, investing in, financing, and managing commercial mortgage loans, other commercial real estate debt investments, commercial mortgage-backed securities, and other commercial real estate-related debt investments. The company has a P/E ratio of 14.16

The average volume for Starwood Property has been 2,655,000 shares per day over the past 30 days Starwood Property has a market cap of $4.1 billion and is part of the real estate industry Shares are up 7.8% year to date as of the close of trading on Monday

TheStreet Ratings rates Starwood Property as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, 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 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 Real Estate Investment Trusts (REITs) industry. The net income increased by 24.1% when compared to the same quarter one year prior, going from $50.16 million to $62.24 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.7%. Since the same quarter one year prior, revenues slightly increased by 7.0%. 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.
  • The gross profit margin for STARWOOD PROPERTY TRUST 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 74.81% 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.
  • STARWOOD PROPERTY TRUST INC's earnings per share declined by 13.2% 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, STARWOOD PROPERTY TRUST INC increased its bottom line by earning $1.78 versus $1.41 in the prior year. This year, the market expects an improvement in earnings ($1.94 versus $1.78).

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

Sun Life Financial

Dividend Yield: 4.70%

Sun Life Financial (NYSE: SLF) shares currently have a dividend yield of 4.70%.

Sun Life Financial Inc., an international financial services organization, provides a range of protection and wealth accumulation products and services to individuals and corporate customers. The company has a P/E ratio of 13.08

The average volume for Sun Life Financial has been 439,400 shares per day over the past 30 days Sun Life Financial has a market cap of $17.9 billion and is part of the insurance industry Shares are up 11.6% year to date as of the close of trading on Monday

TheStreet Ratings rates Sun Life Financial 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, solid stock price performance, good cash flow from operations 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:
  • SLF's revenue growth has slightly outpaced the industry average of 18.6%. Since the same quarter one year prior, revenues rose by 19.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels.
  • Compared to its closing price of one year ago, SLF's share price has jumped by 37.57%, 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, SLF should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has significantly increased by 229.25% to $972.00 million when compared to the same quarter last year. In addition, SUN LIFE FINANCIAL INC has also vastly surpassed the industry average cash flow growth rate of -64.99%.
  • 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 Insurance industry and the overall market on the basis of return on equity, SUN LIFE FINANCIAL 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.

Senior Housing Properties

Dividend Yield: 6.00%

Senior Housing Properties (NYSE: SNH) shares currently have a dividend yield of 6.00%.

Senior Housing Properties Trust, a real estate investment trust (REIT), primarily invests in senior housing properties in the United States. The trust invests in hospitals, nursing homes, senior apartments, independent living properties, and assisted living properties. The company has a P/E ratio of 32.84

The average volume for Senior Housing Properties has been 1,630,400 shares per day over the past 30 days Senior Housing Properties has a market cap of $4.9 billion and is part of the real estate industry Shares are up 9.2% year to date as of the close of trading on Monday

TheStreet Ratings rates Senior Housing Properties as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, good cash flow from operations, increase in net income and solid stock price performance. 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 7.7%. Since the same quarter one year prior, revenues rose by 30.3%. 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 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 8.9% when compared to the same quarter one year prior, going from $32.35 million to $35.24 million.
  • Net operating cash flow has slightly increased to $73.70 million or 1.82% when compared to the same quarter last year. In addition, SENIOR HOUSING PPTYS TRUST has also modestly surpassed the industry average cash flow growth rate of -0.16%.
  • 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.

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

Himax Technologies

Dividend Yield: 4.80%

Himax Technologies (NASDAQ: HIMX) shares currently have a dividend yield of 4.80%.

Himax Technologies, Inc. designs, develops, and markets semiconductors for flat panel displays. The company operates in two segments, Driver IC and Non-Driver Products. The company has a P/E ratio of 16.69

The average volume for Himax Technologies has been 5,438,700 shares per day over the past 30 days Himax Technologies has a market cap of $885.2 million and is part of the electronics industry Shares are up 117.5% year to date as of the close of trading on Monday

TheStreet Ratings rates Himax Technologies 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, solid stock price performance, growth in earnings per share and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • HIMX's revenue growth has slightly outpaced the industry average of 1.6%. Since the same quarter one year prior, revenues slightly increased by 5.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HIMX's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, HIMX has a quick ratio of 1.63, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 195.02% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HIMX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • HIMAX TECHNOLOGIES INC has improved earnings per share by 14.3% 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, HIMAX TECHNOLOGIES INC increased its bottom line by earning $0.30 versus $0.06 in the prior year. This year, the market expects an improvement in earnings ($0.42 versus $0.30).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 24.0% when compared to the same quarter one year prior, going from $11.31 million to $14.03 million.

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

Pioneer Southwest Energy Partners

Dividend Yield: 6.10%

Pioneer Southwest Energy Partners (NYSE: PSE) shares currently have a dividend yield of 6.10%.

Pioneer Southwest Energy Partners L.P. owns, acquires, explores, and develops oil and gas properties in the United States. It produces oil, natural gas liquids, and gas in onshore Texas and eight counties in the southeast region of New Mexico. The company has a P/E ratio of 11.17

The average volume for Pioneer Southwest Energy Partners has been 368,800 shares per day over the past 30 days Pioneer Southwest Energy Partners has a market cap of $1.2 billion and is part of the energy industry Shares are up 51% year to date as of the close of trading on Monday

TheStreet Ratings rates Pioneer Southwest Energy Partners as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 26.31% and other important driving factors, this stock has surged by 36.66% 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, PSE 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 significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 26.5% when compared to the same quarter one year prior, rising from $13.57 million to $17.17 million.
  • The gross profit margin for PIONEER SOUTHWEST ENERGY -LP is rather high; currently it is at 61.70%. Regardless of PSE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PSE's net profit margin of 36.02% significantly outperformed against the industry.
  • The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that PSE's debt-to-equity ratio is low, the quick ratio, which is currently 0.56, displays a potential problem in covering short-term cash needs.
  • 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 slightly dropped by 6.0%. The declining revenue has not hurt the company's bottom line, with increasing 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.

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