What To Buy: Top 5 Buy-Rated Dividend Stocks: TCAP, GNI, NTE, TCRD, VGR

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."

Triangle Capital Corporation

Dividend Yield: 7.40%

Triangle Capital Corporation (NYSE: TCAP) shares currently have a dividend yield of 7.40%.

Triangle Capital Corporation is a business development company specializing in private equity and mezzanine investments. The company has a P/E ratio of 11.54.

The average volume for Triangle Capital Corporation has been 177,800 shares per day over the past 30 days. Triangle Capital Corporation has a market cap of $809.2 million and is part of the financial services industry. Shares are up 16.6% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Triangle Capital Corporation as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, solid stock price performance, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 12.7%. Since the same quarter one year prior, revenues rose by 24.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 Capital Markets industry and the overall market, TRIANGLE CAPITAL CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • 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. 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.
  • Net operating cash flow has significantly increased by 368.53% to $94.90 million when compared to the same quarter last year. In addition, TRIANGLE CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of 8.52%.
  • The gross profit margin for TRIANGLE CAPITAL CORP is currently very high, coming in at 78.04%. Regardless of TCAP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TCAP's net profit margin of 80.15% significantly outperformed against the industry.

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

Great Northern Iron Ore

Dividend Yield: 13.80%

Great Northern Iron Ore (NYSE: GNI) shares currently have a dividend yield of 13.80%.

Great Northern Iron Ore Properties, a conventional nonvoting trust, owns and leases mineral and non-mineral properties on the Mesabi Iron Range in northeastern Minnesota. The company has a P/E ratio of 6.99.

The average volume for Great Northern Iron Ore has been 13,600 shares per day over the past 30 days. Great Northern Iron Ore has a market cap of $108.5 million and is part of the metals & mining industry. Shares are up 6.6% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Great Northern Iron Ore as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. 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:
  • GNI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.92, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for GREAT NORTHERN IRON ORE PPTY is currently very high, coming in at 79.90%. Regardless of GNI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GNI's net profit margin of 79.89% significantly outperformed against the industry.
  • The revenue fell significantly faster than the industry average of 6.2%. Since the same quarter one year prior, revenues fell by 31.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, GREAT NORTHERN IRON ORE PPTY's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • In its most recent trading session, GNI 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.

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

Nam Tai Electronics

Dividend Yield: 7.50%

Nam Tai Electronics (NYSE: NTE) shares currently have a dividend yield of 7.50%.

Nam Tai Electronics, Inc. provides electronics manufacturing and design services to the original equipment manufacturers of telecommunication and consumer electronic products. The company has a P/E ratio of 4.82.

The average volume for Nam Tai Electronics has been 637,200 shares per day over the past 30 days. Nam Tai Electronics has a market cap of $358.4 million and is part of the electronics industry. Shares are down 41.2% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Nam Tai Electronics as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and impressive record of earnings per share 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:
  • NTE's very impressive revenue growth greatly exceeded the industry average of 4.8%. Since the same quarter one year prior, revenues leaped by 64.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • NTE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, NTE has a quick ratio of 2.15, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Electronic Equipment, Instruments & Components industry and the overall market, NAM TAI ELECTRONIC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • NAM TAI ELECTRONIC reported significant earnings per share improvement 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. During the past fiscal year, NAM TAI ELECTRONIC turned its bottom line around by earning $1.47 versus -$0.01 in the prior year.

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

THL Credit

Dividend Yield: 8.70%

THL Credit (NASDAQ: TCRD) shares currently have a dividend yield of 8.70%.

THL Credit, Inc. is a business development company specializing in direct and fund of fund investments. The fund seeks to invest in debt and equity securities of middle market companies. The company has a P/E ratio of 10.23.

The average volume for THL Credit has been 596,600 shares per day over the past 30 days. THL Credit has a market cap of $530.6 million and is part of the financial services industry. Shares are up 5.8% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates THL Credit as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, increase in stock price during the past year, impressive record of earnings per share growth and compelling growth 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:
  • TCRD's very impressive revenue growth greatly exceeded the industry average of 12.7%. Since the same quarter one year prior, revenues leaped by 92.8%. 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. 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.
  • THL CREDIT INC reported significant earnings per share improvement 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, THL CREDIT INC increased its bottom line by earning $1.26 versus $1.19 in the prior year. This year, the market expects an improvement in earnings ($1.41 versus $1.26).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 161.7% when compared to the same quarter one year prior, rising from $5.97 million to $15.62 million.
  • The gross profit margin for THL CREDIT INC is rather high; currently it is at 68.10%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 68.87% significantly outperformed against 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.

Vector Group

Dividend Yield: 9.80%

Vector Group (NYSE: VGR) shares currently have a dividend yield of 9.80%.

a private equity investment firm making investments in management buyout and recapitalizations; $1.4B of acquisitions in 1998; investments typically $150-200M enterprise value, annouced final closing of BRS & Co. II, L.P. The company has a P/E ratio of 30.94.

The average volume for Vector Group has been 345,700 shares per day over the past 30 days. Vector Group has a market cap of $1.5 billion and is part of the tobacco industry. Shares are up 11.5% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Vector Group as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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 Tobacco industry. The net income increased by 246.9% when compared to the same quarter one year prior, rising from $3.90 million to $13.51 million.
  • The gross profit margin for VECTOR GROUP LTD is rather high; currently it is at 52.25%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, VGR's net profit margin of 9.89% significantly trails the industry average.
  • VGR, with its decline in revenue, slightly underperformed the industry average of 2.1%. Since the same quarter one year prior, revenues slightly dropped by 6.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • VECTOR GROUP LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, VECTOR GROUP LTD reported lower earnings of $0.30 versus $0.82 in the prior year.
  • In its most recent trading session, VGR 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, 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.

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