5 Buy-Rated Dividend Stocks: ETR, BMR, HIW, EPB, ED

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."

Entergy

Dividend Yield: 5.00%

Entergy (NYSE: ETR) shares currently have a dividend yield of 5.00%.

Entergy Corporation, together with its subsidiaries, engages in the electric power production and retail electric distribution operations in the United States. The company generates electricity through various sources, such as gas/oil, nuclear, coal, and hydro power. The company has a P/E ratio of 12.29.

The average volume for Entergy has been 1,459,800 shares per day over the past 30 days. Entergy has a market cap of $11.8 billion and is part of the utilities industry. Shares are up 3.7% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Entergy as a buy. Among the primary strengths of the company is its revenue growth. 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 16.8%. Since the same quarter one year prior, revenues slightly increased by 8.7%. 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.
  • ENTERGY CORP 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. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, ENTERGY CORP reported lower earnings of $4.75 versus $7.54 in the prior year. This year, the market expects an improvement in earnings ($4.95 versus $4.75).
  • The gross profit margin for ENTERGY CORP is currently lower than what is desirable, coming in at 26.13%. Regardless of ETR'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 6.13% trails the industry average.
  • In its most recent trading session, ETR 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, 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.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Electric Utilities industry and the overall market on the basis of return on equity, ENTERGY CORP has outperformed in comparison with the industry average, but has underperformed when compared to 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.

BioMed Realty

Dividend Yield: 4.80%

BioMed Realty (NYSE: BMR) shares currently have a dividend yield of 4.80%.

BioMed Realty Trust, Inc. operates as a real estate investment trust (REIT) that focuses on providing real estate to the life science industry in the United States. The company has a P/E ratio of 116.23.

The average volume for BioMed Realty has been 1,569,900 shares per day over the past 30 days. BioMed Realty has a market cap of $3.8 billion and is part of the real estate industry. Shares are up 2.2% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates BioMed Realty as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, impressive record of earnings per share growth, increase in stock price during the past year 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:
  • The revenue growth came in higher than the industry average of 9.2%. Since the same quarter one year prior, revenues rose by 28.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 392.4% when compared to the same quarter one year prior, rising from -$5.06 million to $14.80 million.
  • BIOMED REALTY TRUST 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, BIOMED REALTY TRUST INC reported lower earnings of $0.01 versus $0.18 in the prior year. This year, the market expects an improvement in earnings ($0.16 versus $0.01).
  • 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, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, BIOMED REALTY TRUST INC underperformed against that of the industry average and is significantly less than 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.

Highwoods Properties

Dividend Yield: 4.70%

Highwoods Properties (NYSE: HIW) shares currently have a dividend yield of 4.70%.

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 53.46.

The average volume for Highwoods Properties has been 970,100 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 7.1% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Highwoods Properties 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, revenue growth, 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:
  • HIGHWOODS PROPERTIES INC has improved earnings per share by 38.5% 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, HIGHWOODS PROPERTIES INC increased its bottom line by earning $0.59 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($0.67 versus $0.59).
  • 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 107.1% when compared to the same quarter one year prior, rising from $13.59 million to $28.15 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.2%. Since the same quarter one year prior, revenues slightly increased by 8.5%. 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 slightly increased to $74.81 million or 4.95% when compared to the same quarter last year. In addition, HIGHWOODS PROPERTIES INC has also modestly surpassed the industry average cash flow growth rate of -0.31%.

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

El Paso Pipeline Partners

Dividend Yield: 6.00%

El Paso Pipeline Partners (NYSE: EPB) shares currently have a dividend yield of 6.00%.

El Paso Pipeline Partners, L.P. engages in the ownership and operation of interstate natural gas transportation and terminaling facilities in the United States. The company has a P/E ratio of 19.47.

The average volume for El Paso Pipeline Partners has been 474,700 shares per day over the past 30 days. El Paso Pipeline Partners has a market cap of $9.1 billion and is part of the energy industry. Shares are up 13.2% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates El Paso Pipeline Partners as a buy. The company's strengths can be seen in multiple areas, such as its 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 has had generally high debt management risk by most measures that we evaluated.

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 34.6% when compared to the same quarter one year prior, rising from $101.00 million to $136.00 million.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, EL PASO PIPELINE PARTNERS LP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for EL PASO PIPELINE PARTNERS LP is currently very high, coming in at 71.31%. It has increased significantly from the same period last year. Along with this, the net profit margin of 37.88% significantly outperformed against the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.2%. Since the same quarter one year prior, revenues slightly dropped by 2.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

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

Consolidated Edison

Dividend Yield: 4.10%

Consolidated Edison (NYSE: ED) shares currently have a dividend yield of 4.10%.

Consolidated Edison, Inc., through its subsidiaries, engages in regulated electric, gas, and steam delivery businesses. The company has a P/E ratio of 17.28.

The average volume for Consolidated Edison has been 1,947,700 shares per day over the past 30 days. Consolidated Edison has a market cap of $17.4 billion and is part of the utilities industry. Shares are up 5.7% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Consolidated Edison as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels 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:
  • ED's revenue growth has slightly outpaced the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 1.7%. 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 $1,057.00 million or 25.08% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.45%.
  • CONSOLIDATED EDISON INC's earnings per share declined by 19.2% 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, CONSOLIDATED EDISON INC increased its bottom line by earning $3.86 versus $3.57 in the prior year. For the next year, the market is expecting a contraction of 2.8% in earnings ($3.75 versus $3.86).
  • Even though the current debt-to-equity ratio is 1.04, it is still below the industry average, suggesting that this level of debt is acceptable within the Multi-Utilities industry. Despite the fact that ED's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.59 is low and demonstrates weak liquidity.

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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