5 Buy-Rated Dividend Stocks: DFT, PDLI, APL, NGLS, RDS.A

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."

Dupont Fabros Technology

Dividend Yield: 4.10%

Dupont Fabros Technology (NYSE: DFT) shares currently have a dividend yield of 4.10%.

DuPont Fabros Technology, Inc., a real estate investment trust (REIT), engages in the ownership, acquisition, development, operation, management, and lease of large-scale data center facilities in the United States. The company has a P/E ratio of 47.12.

The average volume for Dupont Fabros Technology has been 646,000 shares per day over the past 30 days. Dupont Fabros Technology has a market cap of $1.6 billion and is part of the real estate industry. Shares are up 2.1% year to date as of the close of trading on Friday.

TheStreet Ratings rates Dupont Fabros Technology as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, increase in net income, expanding profit margins and notable return on equity. 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 rose by 10.7%. 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 significantly increased by 106.43% to $37.98 million when compared to the same quarter last year.
  • The net income increased by 39.2% when compared to the same quarter one year prior, rising from $13.49 million to $18.78 million.
  • 38.25% is the gross profit margin for DUPONT FABROS TECHNOLOGY INC which we consider to be strong. It has increased from the same quarter the previous year.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization.

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

PDL BioPharma

Dividend Yield: 7.70%

PDL BioPharma (NASDAQ: PDLI) shares currently have a dividend yield of 7.70%.

PDL BioPharma, Inc. engages in intellectual property asset management and patent portfolio and related assets investment activities. The company has a P/E ratio of 4.85.

The average volume for PDL BioPharma has been 1,807,200 shares per day over the past 30 days. PDL BioPharma has a market cap of $1.1 billion and is part of the drugs industry. Shares are up 10.9% year to date as of the close of trading on Friday.

TheStreet Ratings rates PDL BioPharma as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, compelling growth in net income, increase in stock price during the past year 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 rose by 14.1%. 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 slightly increased to $109.85 million or 4.72% when compared to the same quarter last year.
  • The net income increased by 27.5% when compared to the same quarter one year prior, rising from $73.50 million to $93.74 million.
  • Compared to where it was trading one year ago, PDLI is up 4.97% to its most recent closing price of 7.81. 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.
  • PDL BIOPHARMA INC has improved earnings per share by 19.2% 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, PDL BIOPHARMA INC increased its bottom line by earning $1.47 versus $1.15 in the prior year. This year, the market expects an improvement in earnings ($1.73 versus $1.47).

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

Atlas Pipeline Partners

Dividend Yield: 6.70%

Atlas Pipeline Partners (NYSE: APL) shares currently have a dividend yield of 6.70%.

Atlas Pipeline Partners, L.P. operates in the gathering and processing segments of the midstream natural gas industry. The company operates in two segments, Gathering and Processing; and Transportation, Treating, and Other.

The average volume for Atlas Pipeline Partners has been 439,700 shares per day over the past 30 days. Atlas Pipeline Partners has a market cap of $2.9 billion and is part of the energy industry. Shares are up 17.9% year to date as of the close of trading on Friday.

TheStreet Ratings rates Atlas Pipeline Partners as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, increase in stock price during the past year 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:
  • APL's very impressive revenue growth greatly exceeded the industry average of 6.6%. Since the same quarter one year prior, revenues leaped by 109.5%. 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 increased to $30.47 million or 39.85% when compared to the same quarter last year. In addition, ATLAS PIPELINE PARTNER LP has also vastly surpassed the industry average cash flow growth rate of -15.84%.
  • 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. 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.
  • ATLAS PIPELINE PARTNER LP 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, ATLAS PIPELINE PARTNER LP reported lower earnings of $0.97 versus $5.22 in the prior year. This year, the market expects an improvement in earnings ($1.76 versus $0.97).
  • APL's debt-to-equity ratio of 0.72 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 0.91 is weak.

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

Targa Resources Partners

Dividend Yield: 5.70%

Targa Resources Partners (NYSE: NGLS) shares currently have a dividend yield of 5.70%.

Targa Resources Partners LP provides midstream natural gas, natural gas liquid (NGL), terminaling, and crude oil gathering services in the United States. The company operates in two divisions, Gathering and Processing, and Logistics and Marketing. The company has a P/E ratio of 131.60.

The average volume for Targa Resources Partners has been 333,100 shares per day over the past 30 days. Targa Resources Partners has a market cap of $5.3 billion and is part of the energy industry. Shares are up 31.3% year to date as of the close of trading on Friday.

TheStreet Ratings rates Targa Resources Partners as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and solid stock price performance. 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 revenue growth came in higher than the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 9.3%. 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.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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.
  • TARGA RESOURCES PARTNERS LP 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, TARGA RESOURCES PARTNERS LP reported lower earnings of $1.20 versus $1.98 in the prior year. For the next year, the market is expecting a contraction of 21.7% in earnings ($0.94 versus $1.20).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 43.9% when compared to the same quarter one year ago, falling from $46.90 million to $26.30 million.
  • The debt-to-equity ratio of 1.45 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, NGLS maintains a poor quick ratio of 0.82, which illustrates the inability to avoid short-term cash problems.

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

Royal Dutch Shell

Dividend Yield: 4.70%

Royal Dutch Shell (NYSE: RDS.A) shares currently have a dividend yield of 4.70%.

Royal Dutch Shell plc operates as an independent oil and gas company worldwide. The company explores for and extracts crude oil, natural gas, and natural gas liquids. The company has a P/E ratio of 8.28.

The average volume for Royal Dutch Shell has been 2,216,500 shares per day over the past 30 days. Royal Dutch Shell has a market cap of $205.8 billion and is part of the energy industry. Shares are down 5.2% year to date as of the close of trading on Friday.

TheStreet Ratings rates Royal Dutch Shell as a buy. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels 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:
  • RDS.A's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.82 is somewhat weak and could be cause for future problems.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.5%. Since the same quarter one year prior, revenues slightly dropped by 3.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ROYAL DUTCH SHELL PLC 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, ROYAL DUTCH SHELL PLC reported lower earnings of $8.50 versus $9.94 in the prior year. This year, the market expects an improvement in earnings ($15.12 versus $8.50).
  • The gross profit margin for ROYAL DUTCH SHELL PLC is currently extremely low, coming in at 14.88%. Regardless of RDS.A'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 1.54% 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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