3 Buy-Rated Dividend Stocks Leading The Pack: BP, BPL, APU

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 3 stocks with substantial yields, that ultimately, we have rated "Buy."

BP

Dividend Yield: 5.30%

BP (NYSE: BP) shares currently have a dividend yield of 5.30%.

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 11.23.

The average volume for BP has been 5,160,600 shares per day over the past 30 days. BP has a market cap of $129.7 billion and is part of the energy industry. Shares are down 1.8% year to date as of the close of trading on Tuesday.

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 -17.85%.
  • 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.

Buckeye Partners L.P

Dividend Yield: 6.30%

Buckeye Partners L.P (NYSE: BPL) shares currently have a dividend yield of 6.30%.

Buckeye Partners, L.P. owns and operates refined petroleum products pipeline systems in the United States. Its Pipelines & Terminals segment transports refined petroleum products; and provides bulk storage and terminal throughput services in the continental United States. The company has a P/E ratio of 24.06.

The average volume for Buckeye Partners L.P has been 326,400 shares per day over the past 30 days. Buckeye Partners L.P has a market cap of $6.6 billion and is part of the energy industry. Shares are up 51.6% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Buckeye Partners L.P 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, compelling growth in net income 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 revenue growth came in higher than the industry average of 10.1%. Since the same quarter one year prior, revenues slightly increased by 2.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BUCKEYE PARTNERS LP has improved earnings per share by 30.9% 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, BUCKEYE PARTNERS LP increased its bottom line by earning $2.31 versus $1.25 in the prior year. This year, the market expects an improvement in earnings ($3.36 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 Oil, Gas & Consumable Fuels industry. The net income increased by 40.5% when compared to the same quarter one year prior, rising from $54.38 million to $76.43 million.
  • Powered by its strong earnings growth of 30.90% and other important driving factors, this stock has surged by 28.92% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • The gross profit margin for BUCKEYE PARTNERS LP is rather low; currently it is at 16.25%. Regardless of BPL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, BPL's net profit margin of 7.60% compares favorably to 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.

AmeriGas Partners

Dividend Yield: 7.90%

AmeriGas Partners (NYSE: APU) shares currently have a dividend yield of 7.90%.

AmeriGas Partners, L.P. operates as a retail and wholesale distributor of propane gas, and related equipment and supplies in the United States. The company has a P/E ratio of 25.29.

The average volume for AmeriGas Partners has been 296,200 shares per day over the past 30 days. AmeriGas Partners has a market cap of $3.9 billion and is part of the utilities industry. Shares are up 12.1% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates AmeriGas Partners as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, compelling growth in net income, revenue growth, growth in earnings per share and expanding profit margins. 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:
  • 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.
  • 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 61.3% when compared to the same quarter one year prior, rising from -$89.38 million to -$34.60 million.
  • APU's revenue growth trails the industry average of 17.4%. Since the same quarter one year prior, revenues slightly increased by 1.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AMERIGAS PARTNERS -LP 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, AMERIGAS PARTNERS -LP swung to a loss, reporting -$0.05 versus $1.51 in the prior year. This year, the market expects an improvement in earnings ($2.27 versus -$0.05).
  • 38.42% is the gross profit margin for AMERIGAS PARTNERS -LP which we consider to be strong. Regardless of APU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -5.94% 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.

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