5 Buy-Rated Dividend Stocks: ORI, SPH, POM, GOV, KKR

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."

Old Republic International

Dividend Yield: 5.50%

Old Republic International (NYSE: ORI) shares currently have a dividend yield of 5.50%.

Old Republic International Corporation, through its subsidiaries, engages in underwriting insurance products primarily in the United States and Canada.

The average volume for Old Republic International has been 1,587,400 shares per day over the past 30 days Old Republic International has a market cap of $3.4 billion and is part of the insurance industry Shares are up 22.5% year to date as of the close of trading on Wednesday

TheStreet Ratings rates Old Republic International as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • This stock has managed to rise its share value by 54.28% over the past twelve months. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ORI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • OLD REPUBLIC INTL CORP has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, OLD REPUBLIC INTL CORP continued to lose money by earning -$0.27 versus -$0.55 in the prior year. This year, the market expects an improvement in earnings ($0.58 versus -$0.27).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 13950.0% when compared to the same quarter one year prior, rising from $0.40 million to $56.20 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 18.6%. Since the same quarter one year prior, revenues slightly increased by 9.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ORI's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels.

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

Suburban Propane Partners

Dividend Yield: 7.40%

Suburban Propane Partners (NYSE: SPH) shares currently have a dividend yield of 7.40%.

Suburban Propane Partners, L.P., through its subsidiaries, engages in the retail marketing and distribution of propane, fuel oil, and refined fuels. The company has a P/E ratio of 34.82

The average volume for Suburban Propane Partners has been 264,500 shares per day over the past 30 days Suburban Propane Partners has a market cap of $2.8 billion and is part of the utilities industry Shares are up 20.3% year to date as of the close of trading on Wednesday

TheStreet Ratings rates Suburban Propane Partners as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, compelling growth in net income, impressive record of earnings per share growth and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • SPH's very impressive revenue growth greatly exceeded the industry average of 18.7%. Since the same quarter one year prior, revenues leaped by 89.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Gas Utilities industry. The net income increased by 164.6% when compared to the same quarter one year prior, rising from $49.57 million to $131.15 million.
  • Net operating cash flow has significantly increased by 70.93% to $72.43 million when compared to the same quarter last year. In addition, SUBURBAN PROPANE PRTNRS -LP has also vastly surpassed the industry average cash flow growth rate of 17.54%.
  • SUBURBAN PROPANE PRTNRS -LP reported significant earnings per share improvement 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, SUBURBAN PROPANE PRTNRS -LP reported lower earnings of $0.48 versus $3.22 in the prior year. This year, the market expects an improvement in earnings ($2.05 versus $0.48).
  • 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.

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

Pepco Holdings

Dividend Yield: 5.50%

Pepco Holdings (NYSE: POM) shares currently have a dividend yield of 5.50%.

Pepco Holdings, Inc., through its subsidiaries, engages in the transmission, distribution, and supply of electricity. The company also distributes and supplies natural gas.

The average volume for Pepco Holdings has been 2,375,400 shares per day over the past 30 days Pepco Holdings has a market cap of $4.9 billion and is part of the utilities industry Shares are up 0.1% year to date as of the close of trading on Wednesday

TheStreet Ratings rates Pepco Holdings as a buy. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. 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 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.
  • Despite the weak revenue results, POM has outperformed against the industry average of 12.4%. Since the same quarter one year prior, revenues slightly dropped by 1.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • PEPCO HOLDINGS 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 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, PEPCO HOLDINGS INC increased its bottom line by earning $1.22 versus $1.14 in the prior year. For the next year, the market is expecting a contraction of 6.8% in earnings ($1.14 versus $1.22).
  • Even though the current debt-to-equity ratio is 1.37, it is still below the industry average, suggesting that this level of debt is acceptable within the Electric Utilities industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.34 is very low and demonstrates very weak liquidity.
  • The gross profit margin for PEPCO HOLDINGS INC is rather low; currently it is at 20.30%. Regardless of POM's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, POM's net profit margin of -35.10% significantly underperformed when compared to 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.

Government Properties Income

Dividend Yield: 6.70%

Government Properties Income (NYSE: GOV) shares currently have a dividend yield of 6.70%.

Government Properties Income Trust operates as a real estate investment trust (REIT) in the United States. It primarily owns and leases office buildings that are leased mainly to government tenants. The company has a P/E ratio of 24.61

The average volume for Government Properties Income has been 540,400 shares per day over the past 30 days Government Properties Income has a market cap of $1.4 billion and is part of the real estate industry Shares are up 6.8% year to date as of the close of trading on Wednesday

TheStreet Ratings rates Government Properties Income as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, 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:
  • GOV's revenue growth has slightly outpaced the industry average of 7.7%. Since the same quarter one year prior, revenues rose by 15.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 35.90% is the gross profit margin for GOVERNMENT PPTYS INCOME TR which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 42.80% significantly outperformed against the industry average.
  • Net operating cash flow has slightly increased to $29.65 million or 1.15% when compared to the same quarter last year. In addition, GOVERNMENT PPTYS INCOME TR has also modestly surpassed the industry average cash flow growth rate of -0.16%.
  • 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 89.3% when compared to the same quarter one year prior, rising from $13.06 million to $24.73 million.

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

KKR

Dividend Yield: 5.60%

KKR (NYSE: KKR) shares currently have a dividend yield of 5.60%.

Kohlberg Kravis Roberts & Co. is a private equity investment firm specializing in acquisitions, leveraged buyouts, management buyouts, special situations, growth equity, mature, and middle market investments. The company has a P/E ratio of 9.22

The average volume for KKR has been 2,626,800 shares per day over the past 30 days KKR has a market cap of $5.1 billion and is part of the financial services industry Shares are up 25% year to date as of the close of trading on Wednesday

TheStreet Ratings rates KKR as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, notable return on equity, good cash flow from operations and increase in net income. 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:
  • Compared to its closing price of one year ago, KKR's share price has jumped by 55.42%, exceeding the performance of the broader market during that same time frame. 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 Capital Markets industry and the overall market, KKR & CO LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 314.30% to $1,510.12 million when compared to the same quarter last year. In addition, KKR & CO LP has also vastly surpassed the industry average cash flow growth rate of 127.39%.
  • KKR & CO LP's earnings per share declined by 13.8% 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, KKR & CO LP increased its bottom line by earning $2.23 versus $0.04 in the prior year. This year, the market expects an improvement in earnings ($2.53 versus $2.23).
  • 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 1.6% when compared to the same quarter one year prior, going from $190.44 million to $193.44 million.

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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