4 Buy-Rated Dividend Stocks: ETP, HCP, CIM, HE

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."

Energy Transfer Partners L.P

Dividend Yield: 7.00%

Energy Transfer Partners L.P (NYSE: ETP) shares currently have a dividend yield of 7.00%.

Energy Transfer Partners, L.P. engages in the natural gas midstream, and intrastate transportation and storage businesses in the United States. The company has a P/E ratio of 77.85.

The average volume for Energy Transfer Partners L.P has been 1,518,800 shares per day over the past 30 days. Energy Transfer Partners L.P has a market cap of $19.0 billion and is part of the energy industry. Shares are up 20.3% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Energy Transfer Partners L.P 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 and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • ETP's very impressive revenue growth greatly exceeded the industry average of 10.7%. Since the same quarter one year prior, revenues leaped by 720.4%. 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 $353.00 million or 38.43% when compared to the same quarter last year. In addition, ENERGY TRANSFER PARTNERS -LP has also vastly surpassed the industry average cash flow growth rate of -25.63%.
  • 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.
  • ENERGY TRANSFER PARTNERS -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. 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, ENERGY TRANSFER PARTNERS -LP increased its bottom line by earning $6.69 versus $2.17 in the prior year. For the next year, the market is expecting a contraction of 67.7% in earnings ($2.16 versus $6.69).

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: 4.70%

HCP (NYSE: HCP) shares currently have a dividend yield of 4.70%.

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 23.48.

The average volume for HCP has been 3,108,700 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 down 0.4% year to date as of the close of trading on Wednesday.

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. 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:
  • HCP's revenue growth has slightly outpaced the industry average of 12.3%. 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 -14.81%.
  • The gross profit margin for HCP INC is rather high; currently it is at 62.52%. 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.

Chimera Investment Corporation

Dividend Yield: 12.70%

Chimera Investment Corporation (NYSE: CIM) shares currently have a dividend yield of 12.70%.

Chimera Investment Corporation operates as a real estate investment trust (REIT) in the United States. The company has a P/E ratio of 21.77.

The average volume for Chimera Investment Corporation has been 8,683,900 shares per day over the past 30 days. Chimera Investment Corporation has a market cap of $2.9 billion and is part of the real estate industry. Shares are up 8% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Chimera Investment Corporation as a buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and solid stock price performance. 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 gross profit margin for CHIMERA INVESTMENT CORP is currently very high, coming in at 89.93%. Regardless of CIM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CIM's net profit margin of 53.60% significantly outperformed against the industry.
  • 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.
  • CHIMERA INVESTMENT CORP's earnings per share declined by 20.0% in the most recent quarter compared to 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, CHIMERA INVESTMENT CORP reported lower earnings of $0.13 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus $0.13).
  • CIM, with its decline in revenue, underperformed when compared the industry average of 12.3%. Since the same quarter one year prior, revenues fell by 13.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing 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.

Hawaiian Electric Industries

Dividend Yield: 4.80%

Hawaiian Electric Industries (NYSE: HE) shares currently have a dividend yield of 4.80%.

Hawaiian Electric Industries, Inc., through its subsidiaries, primarily engages in electric utility and banking businesses primarily in Hawaii. It operates in two segments, Electric Utility and Bank. The company has a P/E ratio of 19.01.

The average volume for Hawaiian Electric Industries has been 460,700 shares per day over the past 30 days. Hawaiian Electric Industries has a market cap of $2.5 billion and is part of the utilities industry. Shares are up 2.8% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Hawaiian Electric Industries as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 407.45% to $48.32 million when compared to the same quarter last year. In addition, HAWAIIAN ELECTRIC INDS has also vastly surpassed the industry average cash flow growth rate of 25.00%.
  • HAWAIIAN ELECTRIC INDS's earnings per share declined by 15.0% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, HAWAIIAN ELECTRIC INDS reported lower earnings of $1.43 versus $1.44 in the prior year. This year, the market expects an improvement in earnings ($1.60 versus $1.43).
  • HE, with its decline in revenue, underperformed when compared the industry average of 18.9%. Since the same quarter one year prior, revenues slightly dropped by 3.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Even though the current debt-to-equity ratio is 1.07, it is still below the industry average, suggesting that this level of debt is acceptable within the Electric Utilities industry.

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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