4 Buy-Rated Dividend Stocks: LHO, BP, PDLI, CLNY

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."

LaSalle Hotel Properties

Dividend Yield: 4.10%

LaSalle Hotel Properties (NYSE: LHO) shares currently have a dividend yield of 4.10%.

LaSalle Hotel Properties, a real estate investment trust (REIT), engages in the purchase, ownership, redevelopment, and leasing of primarily upscale and luxury full-service hotels in convention, resort, and urban business markets in the United States. The company has a P/E ratio of 38.59.

The average volume for LaSalle Hotel Properties has been 809,500 shares per day over the past 30 days. LaSalle Hotel Properties has a market cap of $2.6 billion and is part of the real estate industry. Shares are up 8.3% year to date as of the close of trading on Monday.

TheStreet Ratings rates LaSalle Hotel Properties 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, 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 shows low profit margins.

Highlights from the ratings report include:
  • LHO's revenue growth has slightly outpaced the industry average of 9.2%. Since the same quarter one year prior, revenues slightly increased by 9.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • LASALLE HOTEL PROPERTIES has improved earnings per share by 27.6% 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, LASALLE HOTEL PROPERTIES increased its bottom line by earning $0.52 versus $0.11 in the prior year. This year, the market expects an improvement in earnings ($0.80 versus $0.52).
  • Net operating cash flow has remained constant at $73.73 million with no significant change when compared to the same quarter last year. In addition, LASALLE HOTEL PROPERTIES has modestly surpassed the industry average cash flow growth rate of -0.31%.
  • In its most recent trading session, LHO 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. 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.

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

BP

Dividend Yield: 5.20%

BP (NYSE: BP) shares currently have a dividend yield of 5.20%.

BP p.l.c. provides fuel for transportation, energy for heat and light, lubricants to engines, and petrochemicals products. The company has a P/E ratio of 412.70.

The average volume for BP has been 5,204,100 shares per day over the past 30 days. BP has a market cap of $130.3 billion and is part of the energy industry. Shares are down 1.3% year to date as of the close of trading on Monday.

TheStreet Ratings rates BP as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, attractive valuation levels, good cash flow from operations, impressive record of earnings per share growth and largely solid financial position with reasonable debt levels by most measures. 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 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 234.4% when compared to the same quarter one year prior, rising from -$1,519.00 million to $2,042.00 million.
  • Net operating cash flow has increased to $5,387.00 million or 22.34% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -18.16%.
  • The current debt-to-equity ratio, 0.36, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.96 is somewhat weak and could be cause for future problems.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, BP PLC has underperformed in comparison with the industry average, but has exceeded that of 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.

PDL BioPharma

Dividend Yield: 7.30%

PDL BioPharma (NASDAQ: PDLI) shares currently have a dividend yield of 7.30%.

PDL BioPharma, Inc. engages in intellectual property asset management and patent portfolio and related assets investment activities. The company has a P/E ratio of 5.12.

The average volume for PDL BioPharma has been 1,958,600 shares per day over the past 30 days. PDL BioPharma has a market cap of $1.2 billion and is part of the drugs industry. Shares are up 17% year to date as of the close of trading on Monday.

TheStreet Ratings rates PDL BioPharma as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, impressive record of earnings per share growth and compelling growth in net income. 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:
  • PDLI's revenue growth has slightly outpaced the industry average of 9.3%. Since the same quarter one year prior, revenues rose by 18.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for PDL BIOPHARMA INC is currently very high, coming in at 92.23%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 58.21% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 201.74% to $54.00 million when compared to the same quarter last year. In addition, PDL BIOPHARMA INC has also vastly surpassed the industry average cash flow growth rate of -20.22%.
  • PDL BIOPHARMA INC has improved earnings per share by 24.1% 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, PDL BIOPHARMA INC increased its bottom line by earning $1.47 versus $1.15 in the prior year. This year, the market expects an improvement in earnings ($1.67 versus $1.47).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 33.1% when compared to the same quarter one year prior, rising from $40.18 million to $53.47 million.

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

Colony Financial

Dividend Yield: 6.70%

Colony Financial (NYSE: CLNY) shares currently have a dividend yield of 6.70%.

Colony Financial, Inc. operates as a real estate investment and finance company in the United States. The company has a P/E ratio of 18.62.

The average volume for Colony Financial has been 1,095,700 shares per day over the past 30 days. Colony Financial has a market cap of $1.4 billion and is part of the real estate industry. Shares are up 6.3% year to date as of the close of trading on Monday.

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

Highlights from the ratings report include:
  • CLNY's very impressive revenue growth greatly exceeded the industry average of 9.2%. Since the same quarter one year prior, revenues leaped by 73.0%. 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 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 69.9% when compared to the same quarter one year prior, rising from $15.10 million to $25.65 million.
  • The gross profit margin for COLONY FINANCIAL INC is currently very high, coming in at 80.37%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 57.87% significantly outperformed against 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.
  • COLONY FINANCIAL INC's earnings per share declined by 13.9% 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, COLONY FINANCIAL INC reported lower earnings of $1.34 versus $1.48 in the prior year. This year, the market expects an improvement in earnings ($1.37 versus $1.34).

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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