What To Buy: Top 4 Buy-Rated Dividend Stocks: VLY, TRP, MAC, KMP

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."

Valley National Bancorp

Dividend Yield: 6.50%

Valley National Bancorp (NYSE: VLY) shares currently have a dividend yield of 6.50%.

Valley National Bancorp operates as the bank holding company for the Valley National Bank that provides commercial, retail, and wealth management financial services. The company has a P/E ratio of 13.94.

The average volume for Valley National Bancorp has been 1,192,500 shares per day over the past 30 days. Valley National Bancorp has a market cap of $2.0 billion and is part of the banking industry. Shares are up 8% year to date as of the close of trading on Friday.

TheStreet Ratings rates Valley National Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, increase in net income, notable return on equity and expanding profit margins. 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:
  • Net operating cash flow has significantly increased by 600.29% to $138.36 million when compared to the same quarter last year.
  • 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 3.4% when compared to the same quarter one year prior, going from $32.82 million to $33.92 million.
  • The gross profit margin for VALLEY NATIONAL BANCORP is currently very high, coming in at 75.69%. It has increased from the same quarter the previous year.
  • Since the same quarter one year prior, revenues slightly dropped by 2.9%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.

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

TransCanada

Dividend Yield: 4.10%

TransCanada (NYSE: TRP) shares currently have a dividend yield of 4.10%.

TransCanada Corporation operates as an energy infrastructure company in North America. The company operates in three segments: Natural Gas Pipelines, Oil Pipelines, and Energy. The company has a P/E ratio of 22.02.

The average volume for TransCanada has been 572,500 shares per day over the past 30 days. TransCanada has a market cap of $31.1 billion and is part of the utilities industry. Shares are down 7% year to date as of the close of trading on Friday.

TheStreet Ratings rates TransCanada as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, expanding profit margins and growth in earnings per share. 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 revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 8.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 34.6% when compared to the same quarter one year prior, rising from $286.00 million to $385.00 million.
  • Net operating cash flow has slightly increased to $841.00 million or 8.79% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -15.85%.
  • 48.38% is the gross profit margin for TRANSCANADA CORP which we consider to be strong. Regardless of TRP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TRP's net profit margin of 19.16% significantly outperformed against the industry.
  • TRANSCANADA CORP has improved earnings per share by 33.3% 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, TRANSCANADA CORP reported lower earnings of $1.84 versus $2.17 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.

Macerich Company

Dividend Yield: 4.10%

Macerich Company (NYSE: MAC) shares currently have a dividend yield of 4.10%.

The Macerich Company is an independent real estate investment trust. The firm invests in the real estate markets of the United States. The company has a P/E ratio of 23.65.

The average volume for Macerich Company has been 842,400 shares per day over the past 30 days. Macerich Company has a market cap of $8.0 billion and is part of the real estate industry. Shares are down 2.2% year to date as of the close of trading on Friday.

TheStreet Ratings rates Macerich Company 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, notable return on equity 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:
  • Since the same quarter one year prior, revenues leaped by 62.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has increased to $75.24 million or 28.89% when compared to the same quarter last year.
  • The net income increased by 64.2% when compared to the same quarter one year prior, rising from $133.35 million to $219.00 million.
  • 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.
  • 41.12% is the gross profit margin for MACERICH CO which we consider to be strong. It has increased significantly from the same period last year.

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

Kinder Morgan Energy Partners

Dividend Yield: 6.60%

Kinder Morgan Energy Partners (NYSE: KMP) shares currently have a dividend yield of 6.60%.

Looking for treating, processing, gathering, pipelines & storage businesses. and businesses on the compression side. Also, are interested in looking at new technologies they can deploy across their companies. Look at companies above $5MM EBITDA. The company has a P/E ratio of 24.18.

The average volume for Kinder Morgan Energy Partners has been 1,286,900 shares per day over the past 30 days. Kinder Morgan Energy Partners has a market cap of $24.7 billion and is part of the energy industry. Shares are up 0.3% year to date as of the close of trading on Friday.

TheStreet Ratings rates Kinder Morgan Energy Partners as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • KMP's very impressive revenue growth greatly exceeded the industry average of 6.5%. Since the same quarter one year prior, revenues leaped by 50.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • KINDER MORGAN ENERGY -LP 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, KINDER MORGAN ENERGY -LP turned its bottom line around by earning $1.64 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings ($2.50 versus $1.64).
  • 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 657.6% when compared to the same quarter one year prior, rising from $132.00 million to $1,000.00 million.
  • Net operating cash flow has increased to $979.00 million or 15.72% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -15.85%.
  • 36.36% is the gross profit margin for KINDER MORGAN ENERGY -LP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, KMP's net profit margin of 33.14% 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.

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