4 Buy-Rated Dividend Stocks: CPLP, TNH, NMFC, ARI

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."

Capital Product Partners L.P

Dividend Yield: 9.60%

Capital Product Partners L.P (NASDAQ: CPLP) shares currently have a dividend yield of 9.60%.

Capital Product Partners L.P., a shipping company, provides marine transportation services in Greece.

The average volume for Capital Product Partners L.P has been 191,700 shares per day over the past 30 days. Capital Product Partners L.P has a market cap of $911.1 million and is part of the transportation industry. Shares are up 47.3% year to date as of the close of trading on Friday.

TheStreet Ratings rates Capital Product Partners L.P as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, increase in net income, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • CPLP's revenue growth has slightly outpaced the industry average of 6.2%. Since the same quarter one year prior, revenues slightly increased by 0.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • The gross profit margin for CAPITAL PRODUCT PARTNERS LP is rather high; currently it is at 63.85%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 62.58% significantly outperformed against the industry average.
  • 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 675.6% when compared to the same quarter one year prior, rising from $3.23 million to $25.01 million.
  • CAPITAL PRODUCT PARTNERS LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CAPITAL PRODUCT PARTNERS LP swung to a loss, reporting -$0.45 versus $1.98 in the prior year.

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

Terra Nitrogen Company L.P

Dividend Yield: 8.60%

Terra Nitrogen Company L.P (NYSE: TNH) shares currently have a dividend yield of 8.60%.

Terra Nitrogen Company, L.P. engages in the production and sale of nitrogen fertilizer products. It primarily offers anhydrous ammonia and urea ammonium nitrate solutions. Terra Nitrogen GP Inc. serves as the general partner of the company. Terra Nitrogen Company, L.P. The company has a P/E ratio of 11.95.

The average volume for Terra Nitrogen Company L.P has been 15,700 shares per day over the past 30 days. Terra Nitrogen Company L.P has a market cap of $4.0 billion and is part of the chemicals industry. Shares are up 1.8% year to date as of the close of trading on Friday.

TheStreet Ratings rates Terra Nitrogen Company L.P 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, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. 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 3.0%. Since the same quarter one year prior, revenues rose by 13.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TNH 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. To add to this, TNH has a quick ratio of 2.25, which demonstrates the ability of the company to cover short-term liquidity needs.
  • TERRA NITROGEN CO -LP has improved earnings per share by 31.7% 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, TERRA NITROGEN CO -LP increased its bottom line by earning $17.06 versus $15.33 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 Chemicals industry. The net income increased by 34.3% when compared to the same quarter one year prior, rising from $124.20 million to $166.80 million.
  • The gross profit margin for TERRA NITROGEN CO -LP is currently very high, coming in at 78.54%. It has increased significantly from the same period last year. Along with this, the net profit margin of 74.43% 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.

New Mountain Finance

Dividend Yield: 9.40%

New Mountain Finance (NYSE: NMFC) shares currently have a dividend yield of 9.40%.

New Mountain Finance Corporation operates as a closed-end, non-diversified management investment company. The company has a P/E ratio of 6.63.

The average volume for New Mountain Finance has been 401,900 shares per day over the past 30 days. New Mountain Finance has a market cap of $539.3 million and is part of the financial services industry. Shares are down 2.7% year to date as of the close of trading on Friday.

TheStreet Ratings rates New Mountain Finance as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, expanding profit margins, notable return on equity and increase in net income. 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 5.0%. Since the same quarter one year prior, revenues rose by 33.1%. 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 -$15.76 million or 47.66% when compared to the same quarter last year. In addition, NEW MOUNTAIN FINANCE CORP has also modestly surpassed the industry average cash flow growth rate of 44.54%.
  • The gross profit margin for NEW MOUNTAIN FINANCE CORP is rather high; currently it is at 58.05%. Regardless of NMFC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NMFC's net profit margin of 97.01% significantly outperformed against the industry.
  • 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. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, NEW MOUNTAIN FINANCE CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Capital Markets industry average. The net income increased by 3.8% when compared to the same quarter one year prior, going from $23.67 million to $24.56 million.

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

Apollo Commercial Real Estate Finance

Dividend Yield: 10.20%

Apollo Commercial Real Estate Finance (NYSE: ARI) shares currently have a dividend yield of 10.20%.

Apollo Commercial Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. The company has a P/E ratio of 11.84.

The average volume for Apollo Commercial Real Estate Finance has been 356,100 shares per day over the past 30 days. Apollo Commercial Real Estate Finance has a market cap of $576.4 million and is part of the real estate industry. Shares are down 3.5% year to date as of the close of trading on Friday.

TheStreet Ratings rates Apollo Commercial Real Estate Finance as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins 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:
  • The revenue growth came in higher than the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 31.1%. 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.
  • The gross profit margin for APOLLO COMMERCIAL RE FIN INC is currently very high, coming in at 77.82%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 64.75% significantly outperformed against the industry average.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Real Estate Investment Trusts (REITs) industry average, but is greater than that of the S&P 500. The net income increased by 19.0% when compared to the same quarter one year prior, going from $9.91 million to $11.79 million.
  • APOLLO COMMERCIAL RE FIN INC's earnings per share declined by 42.5% in the most recent quarter compared to 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, APOLLO COMMERCIAL RE FIN INC increased its bottom line by earning $1.68 versus $1.34 in the prior year. For the next year, the market is expecting a contraction of 8.0% in earnings ($1.55 versus $1.68).
  • The share price of APOLLO COMMERCIAL RE FIN INC has not done very well: it is down 5.51% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

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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