4 Buy-Rated Dividend Stocks: AI, FULL, GBDC, BPT

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."

Arlington Asset Investment

Dividend Yield: 14.30%

Arlington Asset Investment (NYSE: AI) shares currently have a dividend yield of 14.30%.

Arlington Asset Investment Corp., an investment firm, acquires mortgage-related and other assets. The company has a P/E ratio of 1.39.

The average volume for Arlington Asset Investment has been 166,500 shares per day over the past 30 days. Arlington Asset Investment has a market cap of $393.1 million and is part of the real estate industry. Shares are up 17.9% year to date as of the close of trading on Friday.

TheStreet Ratings rates Arlington Asset Investment as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, notable return on equity, increase in stock price during the past year and compelling growth in net income. 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:
  • Since the same quarter one year prior, revenues leaped by 61.7%. 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 significantly increased by 96.95% to $15.05 million when compared to the same quarter last year.
  • The net income increased by 49.0% when compared to the same quarter one year prior, rising from $2.14 million to $3.19 million.
  • 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.
  • Compared to where it was trading one year ago, AI is up 4.30% to its most recent closing price of 24.49. Looking ahead, although the push and pull of a bull or bear market could certainly alter the outcome, our view is that this stock's positive fundamentals give it good potential for further appreciation.

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

Full Circle Capital Corp BDC

Dividend Yield: 11.50%

Full Circle Capital Corp BDC (NASDAQ: FULL) shares currently have a dividend yield of 11.50%.

Full Circle Capital Corporation is a business development company and operates as an externally managed non-diversified closed-end management investment company. The company has a P/E ratio of 47.29.

The average volume for Full Circle Capital Corp BDC has been 47,500 shares per day over the past 30 days. Full Circle Capital Corp BDC has a market cap of $60.9 million and is part of the financial services industry. Shares are up 8.2% year to date as of the close of trading on Friday.

TheStreet Ratings rates Full Circle Capital Corp BDC as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, compelling growth in net income, expanding profit margins and impressive record of earnings per share growth. 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:
  • Since the same quarter one year prior, revenues leaped by 437.0%. 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.
  • The net income increased by 365.5% when compared to the same quarter one year prior, rising from -$0.70 million to $1.85 million.
  • The gross profit margin for FULL CIRCLE CAPITAL CORP is rather high; currently it is at 65.40%. It has increased significantly from the same period last year.
  • FULL CIRCLE CAPITAL CORP 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, FULL CIRCLE CAPITAL CORP increased its bottom line by earning $0.52 versus $0.44 in the prior year. This year, the market expects an improvement in earnings ($0.78 versus $0.52).

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

Golub Capital BDC Inc. Class B

Dividend Yield: 7.50%

Golub Capital BDC Inc. Class B (NASDAQ: GBDC) shares currently have a dividend yield of 7.50%.

Golub Capital BDC, Inc. is a business development company and operates as an externally managed closed-end non-diversified management investment company. It invests in debt and minority equity investments in middle-market companies that are, in most cases, sponsored by private equity investors. The company has a P/E ratio of 12.27.

The average volume for Golub Capital BDC Inc. Class B has been 285,000 shares per day over the past 30 days. Golub Capital BDC Inc. Class B has a market cap of $678.5 million and is part of the financial services industry. Shares are up 6.7% year to date as of the close of trading on Friday.

TheStreet Ratings rates Golub Capital BDC Inc. Class B as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, increase in stock price during the past year, compelling growth in net income 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:
  • Since the same quarter one year prior, revenues leaped by 69.5%. 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 where it was trading one year ago, GBDC is up 9.50% to its most recent closing price of 17.05. Looking ahead, although the push and pull of a bull or bear market could certainly alter the outcome, our view is that this stock's positive fundamentals give it good potential for further appreciation.
  • The net income increased by 134.7% when compared to the same quarter one year prior, rising from $5.39 million to $12.66 million.
  • The gross profit margin for GOLUB CAPITAL BDC INC is rather high; currently it is at 68.16%. It has increased from the same quarter the previous year.

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

BP Prudhoe Bay Royalty

Dividend Yield: 10.10%

BP Prudhoe Bay Royalty (NYSE: BPT) shares currently have a dividend yield of 10.10%.

BP Prudhoe Bay Royalty Trust operates as a grantor trust in the United States. The company holds overriding royalty interests constituting a non-operational interest in minerals in the Prudhoe Bay oil field located on the North Slope in Alaska. The company has a P/E ratio of 31.92.

The average volume for BP Prudhoe Bay Royalty has been 110,500 shares per day over the past 30 days. BP Prudhoe Bay Royalty has a market cap of $1.8 billion and is part of the energy industry. Shares are up 23.4% year to date as of the close of trading on Friday.

TheStreet Ratings rates BP Prudhoe Bay Royalty 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:
  • BPT 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, BPT has a quick ratio of 2.31, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for BP PRUDHOE BAY ROYALTY TRUST is currently very high, coming in at 100.00%. BPT has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, BPT's net profit margin of 99.28% significantly outperformed against the industry.
  • BPT, with its decline in revenue, slightly underperformed the industry average of 6.6%. Since the same quarter one year prior, revenues slightly dropped by 8.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 8.6% when compared to the same quarter one year ago, dropping from $56.56 million to $51.68 million.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, BP PRUDHOE BAY ROYALTY TRUST's return on equity significantly exceeds that of both the industry average and 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.

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