5 Buy-Rated Dividend Stocks: MAA, MPW, SO, DFT, HIW

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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."

Mid-America Apartment Communities

Dividend Yield: 4.10%

Mid-America Apartment Communities (NYSE: MAA) shares currently have a dividend yield of 4.10%.

Mid-America Apartment Communities, Inc. is an independent real estate investment trust. The firm invests in the real estate markets of the United States. It is engaged in acquisition, redevelopment, new development, property management, and disposition of multifamily apartment communities. The company has a P/E ratio of 39.94.

The average volume for Mid-America Apartment Communities has been 484,000 shares per day over the past 30 days. Mid-America Apartment Communities has a market cap of $2.9 billion and is part of the real estate industry. Shares are up 5.6% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Mid-America Apartment Communities 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, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • MAA's revenue growth has slightly outpaced the industry average of 12.3%. Since the same quarter one year prior, revenues rose by 14.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MID-AMERICA APT CMNTYS INC has improved earnings per share by 35.1% 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, MID-AMERICA APT CMNTYS INC increased its bottom line by earning $1.57 versus $0.88 in the prior year. This year, the market expects an improvement in earnings ($1.85 versus $1.57).
  • Net operating cash flow has slightly increased to $42.12 million or 9.96% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -14.13%.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, MID-AMERICA APT CMNTYS INC's return on equity is below that of both the industry average and the S&P 500.
  • The change in net income from the same quarter one year ago has exceeded that of the Real Estate Investment Trusts (REITs) industry average, but is less than that of the S&P 500. The net income has decreased by 11.3% when compared to the same quarter one year ago, dropping from $23.89 million to $21.18 million.

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

Medical Properties

Dividend Yield: 5.30%

Medical Properties (NYSE: MPW) shares currently have a dividend yield of 5.30%.

Medical Properties Trust, Inc. operates as a real estate investment trust (REIT) in the United States. It acquires, develops, and invests in healthcare facilities; and leases healthcare facilities to healthcare operating companies and healthcare providers. The company has a P/E ratio of 22.49.

The average volume for Medical Properties has been 1,430,000 shares per day over the past 30 days. Medical Properties has a market cap of $2.3 billion and is part of the real estate industry. Shares are up 27% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Medical Properties as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. 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:
  • The revenue growth greatly exceeded the industry average of 12.3%. Since the same quarter one year prior, revenues rose by 42.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 157.14% and other important driving factors, this stock has surged by 54.76% 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.
  • MEDICAL PROPERTIES TRUST reported significant earnings per share improvement 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, MEDICAL PROPERTIES TRUST increased its bottom line by earning $0.56 versus $0.13 in the prior year. This year, the market expects an improvement in earnings ($0.83 versus $0.56).
  • 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 147.6% when compared to the same quarter one year prior, rising from $10.56 million to $26.16 million.
  • The gross profit margin for MEDICAL PROPERTIES TRUST is currently very high, coming in at 71.03%. It has increased significantly from the same period last year. Along with this, the net profit margin of 44.38% significantly outperformed against 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.

Southern

Dividend Yield: 4.50%

Southern (NYSE: SO) shares currently have a dividend yield of 4.50%.

The Southern Company, together with its subsidiaries, operates as a public electric utility company. The company has a P/E ratio of 19.34.

The average volume for Southern has been 4,536,000 shares per day over the past 30 days. Southern has a market cap of $39.4 billion and is part of the utilities industry. Shares are up 5.7% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Southern as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 18.1%. Since the same quarter one year prior, revenues slightly increased by 8.1%. 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 $737.00 million or 29.75% when compared to the same quarter last year. In addition, SOUTHERN CO has also modestly surpassed the industry average cash flow growth rate of 24.33%.
  • SOUTHERN CO 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. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SOUTHERN CO increased its bottom line by earning $2.67 versus $2.55 in the prior year. This year, the market expects an improvement in earnings ($2.75 versus $2.67).
  • The gross profit margin for SOUTHERN CO is currently lower than what is desirable, coming in at 34.15%. Regardless of SO'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 2.48% trails the industry average.
  • In its most recent trading session, SO 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 toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.

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

Dupont Fabros Technology

Dividend Yield: 4.10%

Dupont Fabros Technology (NYSE: DFT) shares currently have a dividend yield of 4.10%.

DuPont Fabros Technology, Inc., a real estate investment trust (REIT), engages in the ownership, acquisition, development, operation, management, and lease of large-scale data center facilities in the United States. The company has a P/E ratio of 54.18.

The average volume for Dupont Fabros Technology has been 810,100 shares per day over the past 30 days. Dupont Fabros Technology has a market cap of $1.6 billion and is part of the real estate industry. Shares are up 0.9% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Dupont Fabros Technology as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, reasonable valuation levels, 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:
  • 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 25.2% when compared to the same quarter one year prior, rising from $11.79 million to $14.75 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.3%. Since the same quarter one year prior, revenues rose by 12.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $47.81 million or 18.95% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -14.13%.
  • 36.77% is the gross profit margin for DUPONT FABROS TECHNOLOGY INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, DFT's net profit margin of 16.80% 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.

Highwoods Properties

Dividend Yield: 4.60%

Highwoods Properties (NYSE: HIW) shares currently have a dividend yield of 4.60%.

Highwoods Properties, Inc. is a real estate investment trust. The trust engages in leasing, management, development, construction, and other customer-related services for its properties and for third parties. It invests in the real estate markets of United States. The company has a P/E ratio of 61.10.

The average volume for Highwoods Properties has been 1,012,000 shares per day over the past 30 days. Highwoods Properties has a market cap of $3.0 billion and is part of the real estate industry. Shares are up 10.6% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Highwoods Properties as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, 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:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 9.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Net operating cash flow has significantly increased by 91.01% to $42.12 million when compared to the same quarter last year. In addition, HIGHWOODS PROPERTIES INC has also vastly surpassed the industry average cash flow growth rate of -14.13%.
  • HIGHWOODS PROPERTIES INC reported flat earnings per share in the most recent quarter. 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, HIGHWOODS PROPERTIES INC increased its bottom line by earning $0.58 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($0.66 versus $0.58).
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, HIGHWOODS PROPERTIES INC's return on equity is below that of both the industry average and 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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