4 Buy-Rated Dividend Stocks: SBR, AI, GNI, PVD

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 4 stocks with substantial yields, that ultimately, we have rated "Buy."

Sabine Royalty

Dividend Yield: 7.10%

Sabine Royalty (NYSE: SBR) shares currently have a dividend yield of 7.10%.

Sabine Royalty Trust holds royalty and mineral interests in various oil and gas properties in the United States. The company has a P/E ratio of 14.20.

The average volume for Sabine Royalty has been 15,800 shares per day over the past 30 days. Sabine Royalty has a market cap of $749.4 million and is part of the financial services industry. Shares are up 28.8% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Sabine Royalty 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, expanding profit margins, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 10.8%. Since the same quarter one year prior, revenues slightly increased by 1.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SBR has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 16.92, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for SABINE ROYALTY TRUST is currently very high, coming in at 100.00%. SBR has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, SBR's net profit margin of 96.81% significantly outperformed against the industry.
  • The net income growth from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 2.4% when compared to the same quarter one year prior, going from $14.65 million to $15.01 million.
  • 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, SABINE ROYALTY TRUST's return on equity significantly exceeds 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.

Arlington Asset Investment

Dividend Yield: 13.60%

Arlington Asset Investment (NYSE: AI) shares currently have a dividend yield of 13.60%.

Arlington Asset Investment Corp., an investment firm, acquires mortgage-related and other assets. The company has a P/E ratio of 1.45.

The average volume for Arlington Asset Investment has been 197,500 shares per day over the past 30 days. Arlington Asset Investment has a market cap of $411.1 million and is part of the real estate industry. Shares are up 21.7% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Arlington Asset Investment as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, 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:
  • 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, ARLINGTON ASSET INVESTMENT'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 422.78% to $11.66 million when compared to the same quarter last year. In addition, ARLINGTON ASSET INVESTMENT has also vastly surpassed the industry average cash flow growth rate of -75.62%.
  • 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, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • AI, with its very weak revenue results, has greatly underperformed against the industry average of 4.7%. Since the same quarter one year prior, revenues plummeted by 70.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ARLINGTON ASSET INVESTMENT 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, ARLINGTON ASSET INVESTMENT increased its bottom line by earning $15.11 versus $1.98 in the prior year. For the next year, the market is expecting a contraction of 73.1% in earnings ($4.07 versus $15.11).

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

Great Northern Iron Ore

Dividend Yield: 14.40%

Great Northern Iron Ore (NYSE: GNI) shares currently have a dividend yield of 14.40%.

Great Northern Iron Ore Properties, a conventional nonvoting trust, owns and leases mineral and non-mineral properties on the Mesabi Iron Range in northeastern Minnesota. The company has a P/E ratio of 6.73.

The average volume for Great Northern Iron Ore has been 12,100 shares per day over the past 30 days. Great Northern Iron Ore has a market cap of $104.5 million and is part of the metals & mining industry. Shares are up 2.2% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Great Northern Iron Ore as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. 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:
  • GNI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.92, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for GREAT NORTHERN IRON ORE PPTY is currently very high, coming in at 79.90%. Regardless of GNI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GNI's net profit margin of 79.89% significantly outperformed against the industry.
  • The revenue fell significantly faster than the industry average of 0.8%. Since the same quarter one year prior, revenues fell by 31.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income has significantly decreased by 36.0% when compared to the same quarter one year ago, falling from $6.28 million to $4.02 million.
  • 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 Metals & Mining industry and the overall market, GREAT NORTHERN IRON ORE PPTY's return on equity significantly exceeds 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.

Administradora de Fondos de Pensiones-Provi

Dividend Yield: 12.50%

Administradora de Fondos de Pensiones-Provi (NYSE: PVD) shares currently have a dividend yield of 12.50%.

Administradora de Fondos de Pensiones Provida S.A. offers private pension fund administration and related services in the Republic of Chile. The company has a P/E ratio of 12.94.

The average volume for Administradora de Fondos de Pensiones-Provi has been 23,900 shares per day over the past 30 days. Administradora de Fondos de Pensiones-Provi has a market cap of $1.9 billion and is part of the financial services industry. Shares are down 14.9% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Administradora de Fondos de Pensiones-Provi as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, notable return on equity, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • AFP PROVIDA SA 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. During the past fiscal year, AFP PROVIDA SA increased its bottom line by earning $9.85 versus $6.87 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 146.2% when compared to the same quarter one year prior, rising from $67.97 million to $167.35 million.
  • 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, AFP PROVIDA SA's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for AFP PROVIDA SA is rather high; currently it is at 65.39%. Regardless of PVD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PVD's net profit margin of 166.95% significantly outperformed against the industry.
  • PVD, with its decline in revenue, slightly underperformed the industry average of 4.7%. Since the same quarter one year prior, revenues slightly dropped by 4.7%. 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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