5 Buy-Rated Dividend Stocks: DFT, VTR, GAS, GEO, AZN

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."

Dupont Fabros Technology

Dividend Yield: 4.30%

Dupont Fabros Technology (NYSE: DFT) shares currently have a dividend yield of 4.30%.

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 44.58.

The average volume for Dupont Fabros Technology has been 687,800 shares per day over the past 30 days. Dupont Fabros Technology has a market cap of $1.5 billion and is part of the real estate industry. Shares are down 4.5% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Dupont Fabros Technology as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, increase in net income, 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:
  • DFT's revenue growth has slightly outpaced the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 10.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 39.2% when compared to the same quarter one year prior, rising from $13.49 million to $18.78 million.
  • Net operating cash flow has significantly increased by 106.43% to $37.98 million when compared to the same quarter last year. In addition, DUPONT FABROS TECHNOLOGY INC has also vastly surpassed the industry average cash flow growth rate of -81.00%.
  • 38.25% 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. Regardless of the strong results of the gross profit margin, the net profit margin of 20.50% 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.

Ventas

Dividend Yield: 4.10%

Ventas (NYSE: VTR) shares currently have a dividend yield of 4.10%.

Ventas, Inc. is a publicly owned real estate investment trust. The firm engages in investment, management, financing, and leasing of properties in the healthcare industry. It invests in the real estate markets of the United States and Canada. The company has a P/E ratio of 41.03.

The average volume for Ventas has been 1,793,300 shares per day over the past 30 days. Ventas has a market cap of $19.1 billion and is part of the real estate industry. Shares are up 0% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Ventas as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, reasonable valuation levels, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • VTR's revenue growth has slightly outpaced the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 11.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 54.8% when compared to the same quarter one year prior, rising from $74.03 million to $114.58 million.
  • Net operating cash flow has increased to $277.38 million or 28.50% when compared to the same quarter last year. In addition, VENTAS INC has also vastly surpassed the industry average cash flow growth rate of -81.00%.
  • VENTAS INC 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, VENTAS INC reported lower earnings of $1.04 versus $1.41 in the prior year. This year, the market expects an improvement in earnings ($1.54 versus $1.04).

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

AGL Resources

Dividend Yield: 4.10%

AGL Resources (NYSE: GAS) shares currently have a dividend yield of 4.10%.

AGL Resources Inc., an energy services holding company, distributes natural gas to residential, commercial, industrial, and governmental customers in Illinois, Georgia, Virginia, New Jersey, Florida, Tennessee, and Maryland. The company has a P/E ratio of 17.49.

The average volume for AGL Resources has been 443,300 shares per day over the past 30 days. AGL Resources has a market cap of $5.5 billion and is part of the utilities industry. Shares are up 14.6% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates AGL Resources as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, reasonable valuation levels 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:
  • The revenue growth came in higher than the industry average of 17.4%. Since the same quarter one year prior, revenues rose by 31.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AGL RESOURCES INC has improved earnings per share by 46.4% 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 year. We feel that this trend should continue. During the past fiscal year, AGL RESOURCES INC increased its bottom line by earning $2.31 versus $2.15 in the prior year. This year, the market expects an improvement in earnings ($2.62 versus $2.31).
  • 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 44.1% when compared to the same quarter one year prior, rising from $34.00 million to $49.00 million.
  • Net operating cash flow has increased to $311.00 million or 16.91% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.31%.

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

Geo Group

Dividend Yield: 5.80%

Geo Group (NYSE: GEO) shares currently have a dividend yield of 5.80%.

The GEO Group, Inc. provides government-outsourced services specializing in the management of correctional, detention, and re-entry facilities, and the provision of community based services and youth services in the United States, Australia, South Africa, the United Kingdom, and Canada. The company has a P/E ratio of 14.02.

The average volume for Geo Group has been 507,500 shares per day over the past 30 days. Geo Group has a market cap of $2.5 billion and is part of the diversified services industry. Shares are up 22.5% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Geo Group as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, notable return on equity, reasonable valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 55.9% when compared to the same quarter one year prior, rising from $15.03 million to $23.42 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.0%. Since the same quarter one year prior, revenues slightly increased by 4.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, GEO GROUP INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 43.47% and other important driving factors, this stock has surged by 49.84% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GEO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

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

AstraZeneca

Dividend Yield: 7.50%

AstraZeneca (NYSE: AZN) shares currently have a dividend yield of 7.50%.

AstraZeneca PLC engages in the discovery, development, and commercialization of prescription medicines for cardiovascular, gastrointestinal, neuroscience, infection, oncology, and respiratory and inflammation diseases worldwide. The company has a P/E ratio of 10.14.

The average volume for AstraZeneca has been 1,819,300 shares per day over the past 30 days. AstraZeneca has a market cap of $63.4 billion and is part of the drugs industry. Shares are up 6.9% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates AstraZeneca 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, attractive valuation levels, good cash flow from operations, expanding profit margins 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 current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $2,198.00 million or 42.72% when compared to the same quarter last year. In addition, ASTRAZENECA PLC has also vastly surpassed the industry average cash flow growth rate of -61.73%.
  • The gross profit margin for ASTRAZENECA PLC is currently very high, coming in at 90.75%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.51% trails the industry average.
  • 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.

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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