5 Buy-Rated Dividend Stocks: VLY, DLR, MIC, VTR, GAS

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."

Valley National Bancorp

Dividend Yield: 6.10%

Valley National Bancorp (NYSE: VLY) shares currently have a dividend yield of 6.10%.

Valley National Bancorp operates as the bank holding company for the Valley National Bank that provides commercial, retail, and wealth management financial services. The company has a P/E ratio of 14.75.

The average volume for Valley National Bancorp has been 1,183,700 shares per day over the past 30 days. Valley National Bancorp has a market cap of $2.1 billion and is part of the banking industry. Shares are up 13% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Valley National Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, increase in net income, notable return on equity, attractive valuation levels and increase in stock price during the past year. 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:
  • The gross profit margin for VALLEY NATIONAL BANCORP is currently very high, coming in at 75.69%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.31% is above that of the industry average.
  • 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 Commercial Banks industry and the overall market on the basis of return on equity, VALLEY NATIONAL BANCORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The net income growth from the same quarter one year ago has exceeded that of the Commercial Banks industry average, but is less than that of the S&P 500. The net income increased by 3.4% when compared to the same quarter one year prior, going from $32.82 million to $33.92 million.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.3%. Since the same quarter one year prior, revenues slightly dropped by 2.9%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable 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.

Digital Realty

Dividend Yield: 5.80%

Digital Realty (NYSE: DLR) shares currently have a dividend yield of 5.80%.

Digital Realty Trust, Inc., a real estate investment trust (REIT), through its controlling interest in Digital Realty Trust, L.P., engages in the ownership, acquisition, development, redevelopment, and management of technology-related real estate. The company has a P/E ratio of 37.94.

The average volume for Digital Realty has been 1,749,900 shares per day over the past 30 days. Digital Realty has a market cap of $7.0 billion and is part of the real estate industry. Shares are down 21.4% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Digital Realty as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and increase 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:
  • DLR's revenue growth has slightly outpaced the industry average of 9.2%. Since the same quarter one year prior, revenues rose by 18.6%. 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.
  • DIGITAL REALTY TRUST INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, DIGITAL REALTY TRUST INC increased its bottom line by earning $1.47 versus $1.31 in the prior year. For the next year, the market is expecting a contraction of 7.8% in earnings ($1.36 versus $1.47).
  • 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 11.7% when compared to the same quarter one year prior, going from $52.33 million to $58.48 million.
  • Looking at the price performance of DLR's shares over the past 12 months, there is not much good news to report: the stock is down 26.83%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.

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

Macquarie Infrastructure Company

Dividend Yield: 6.40%

Macquarie Infrastructure Company (NYSE: MIC) shares currently have a dividend yield of 6.40%.

Macquarie Infrastructure Company LLC, through its subsidiaries, owns, operates, and invests in a diversified group of infrastructure businesses in the United States.

The average volume for Macquarie Infrastructure Company has been 274,100 shares per day over the past 30 days. Macquarie Infrastructure Company has a market cap of $2.9 billion and is part of the wholesale industry. Shares are up 19% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Macquarie Infrastructure Company as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, MIC's share price has jumped by 33.02%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • 40.84% is the gross profit margin for MACQUARIE INFRASTRUCT CO LLC 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 -0.33% is in-line with the industry average.
  • MACQUARIE INFRASTRUCT CO LLC 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 year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, MACQUARIE INFRASTRUCT CO LLC reported lower earnings of $0.29 versus $0.59 in the prior year. This year, the market expects an improvement in earnings ($1.37 versus $0.29).
  • MIC, with its decline in revenue, slightly underperformed the industry average of 2.0%. Since the same quarter one year prior, revenues slightly dropped by 2.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • MIC's debt-to-equity ratio of 0.98 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.39 is sturdy.

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: 4.30%

Ventas (NYSE: VTR) shares currently have a dividend yield of 4.30%.

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 39.43.

The average volume for Ventas has been 1,790,400 shares per day over the past 30 days. Ventas has a market cap of $18.4 billion and is part of the real estate industry. Shares are down 5.6% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Ventas as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, increase in net income 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 9.2%. 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 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 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. The firm also exceeded the industry average cash flow growth rate of -0.31%.
  • 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 17.30.

The average volume for AGL Resources has been 463,500 shares per day over the past 30 days. AGL Resources has a market cap of $5.4 billion and is part of the utilities industry. Shares are up 12.4% year to date as of the close of trading on Thursday.

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 has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 15.5%. 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 ($2.64 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 -4.54%.

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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