Don't Miss Out: Top 4 Yielding Buy-Rated Stocks: ETR, GOV, GAS, CXW

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."

Entergy

Dividend Yield: 5.30%

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

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 11.72.

The average volume for Entergy has been 1,484,200 shares per day over the past 30 days. Entergy has a market cap of $11.2 billion and is part of the utilities industry. Shares are down 1.9% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Entergy as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and reasonable valuation levels. 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 15.9%. 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.
  • The share price of ENTERGY CORP has not done very well: it is down 7.74% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.

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

Government Properties Income

Dividend Yield: 7.20%

Government Properties Income (NYSE: GOV) shares currently have a dividend yield of 7.20%.

Government Properties Income Trust operates as a real estate investment trust (REIT) in the United States. It primarily owns and leases office buildings that are leased mainly to government tenants. The company has a P/E ratio of 22.04.

The average volume for Government Properties Income has been 502,400 shares per day over the past 30 days. Government Properties Income has a market cap of $1.3 billion and is part of the real estate industry. Shares are down 0.9% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Government Properties Income 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 stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • GOV's revenue growth has slightly outpaced the industry average of 10.8%. Since the same quarter one year prior, revenues rose by 14.9%. 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 increased to $28.84 million or 24.00% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 5.77%.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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.
  • GOVERNMENT PPTYS INCOME TR has improved earnings per share by 12.0% 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, GOVERNMENT PPTYS INCOME TR reported lower earnings of $1.03 versus $1.06 in the prior year. This year, the market expects an improvement in earnings ($1.27 versus $1.03).

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: 4.20%

AGL Resources (NYSE: GAS) shares currently have a dividend yield of 4.20%.

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 17.21.

The average volume for AGL Resources has been 452,300 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% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates AGL Resources as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in stock price during the past year, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. 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 21.1%. 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.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • 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 ($2.67 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.

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

Corrections Corporation of America

Dividend Yield: 5.60%

Corrections Corporation of America (NYSE: CXW) shares currently have a dividend yield of 5.60%.

Corrections Corporation of America, together with its subsidiaries, owns and operates privatized correctional and detention facilities in the United States. The company has a P/E ratio of 12.24.

The average volume for Corrections Corporation of America has been 1,428,500 shares per day over the past 30 days. Corrections Corporation of America has a market cap of $3.9 billion and is part of the diversified services industry. Shares are down 6.1% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Corrections Corporation of America as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations 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:
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, CORRECTIONS CORP AMER's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • Net operating cash flow has increased to $86.00 million or 39.37% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 5.77%.
  • CORRECTIONS CORP AMER's earnings per share declined by 48.6% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, CORRECTIONS CORP AMER increased its bottom line by earning $1.56 versus $1.55 in the prior year. This year, the market expects an improvement in earnings ($1.97 versus $1.56).
  • CXW, with its decline in revenue, underperformed when compared the industry average of 10.8%. Since the same quarter one year prior, revenues slightly dropped by 2.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • In its most recent trading session, CXW 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. 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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