Buy-Rated Dividend Stocks In The Top 4: SLRC, ARI, INTX, MARPS

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."

Solar Capital

Dividend Yield: 7.30%

Solar Capital (NASDAQ: SLRC) shares currently have a dividend yield of 7.30%.

Solar Capital Ltd. is a business development company specializing in investments in leveraged middle market companies. The company has a P/E ratio of 9.95.

The average volume for Solar Capital has been 334,000 shares per day over the past 30 days. Solar Capital has a market cap of $990.4 million and is part of the financial services industry. Shares are down 8% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Solar Capital as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • SLRC's revenue growth has slightly outpaced the industry average of 12.3%. Since the same quarter one year prior, revenues rose by 12.4%. 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 114.82% to $6.58 million when compared to the same quarter last year. In addition, SOLAR CAPITAL LTD has also vastly surpassed the industry average cash flow growth rate of 6.75%.
  • The gross profit margin for SOLAR CAPITAL LTD is rather high; currently it is at 61.50%. Regardless of SLRC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SLRC's net profit margin of -0.03% significantly underperformed when compared to the industry average.
  • 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. When compared to other companies in the Capital Markets industry and the overall market, SOLAR CAPITAL LTD's return on equity is below 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.

Apollo Commercial Real Estate Finance

Dividend Yield: 10.20%

Apollo Commercial Real Estate Finance (NYSE: ARI) shares currently have a dividend yield of 10.20%.

Apollo Commercial Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. The company has a P/E ratio of 11.89.

The average volume for Apollo Commercial Real Estate Finance has been 258,700 shares per day over the past 30 days. Apollo Commercial Real Estate Finance has a market cap of $578.7 million and is part of the real estate industry. Shares are down 3.3% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Apollo Commercial Real Estate Finance as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations 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:
  • The revenue growth came in higher than the industry average of 10.8%. Since the same quarter one year prior, revenues rose by 31.1%. 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.
  • The gross profit margin for APOLLO COMMERCIAL RE FIN INC is currently very high, coming in at 77.82%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 64.75% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 209.16% to $11.31 million when compared to the same quarter last year. In addition, APOLLO COMMERCIAL RE FIN INC has also vastly surpassed the industry average cash flow growth rate of 5.47%.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Real Estate Investment Trusts (REITs) industry average, but is greater than that of the S&P 500. The net income increased by 19.0% when compared to the same quarter one year prior, going from $9.91 million to $11.79 million.
  • APOLLO COMMERCIAL RE FIN INC's earnings per share declined by 42.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, APOLLO COMMERCIAL RE FIN INC increased its bottom line by earning $1.68 versus $1.34 in the prior year. For the next year, the market is expecting a contraction of 15.5% in earnings ($1.42 versus $1.68).

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

Intersections

Dividend Yield: 8.90%

Intersections (NASDAQ: INTX) shares currently have a dividend yield of 8.90%.

Intersections Inc. provides consumer identity risk management services in the United States. Its services help consumers understand and monitor their credit profiles and other personal information, and protect themselves against identity theft or fraud. The company has a P/E ratio of 15.72.

The average volume for Intersections has been 60,900 shares per day over the past 30 days. Intersections has a market cap of $162.2 million and is part of the diversified services industry. Shares are down 5.5% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Intersections 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, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • INTX's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.48, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for INTERSECTIONS INC is rather high; currently it is at 66.33%. Regardless of INTX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.94% trails the industry average.
  • INTERSECTIONS INC 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. 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, INTERSECTIONS INC increased its bottom line by earning $1.06 versus $0.97 in the prior year.
  • INTX, with its decline in revenue, slightly underperformed the industry average of 7.3%. Since the same quarter one year prior, revenues slightly dropped by 7.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing 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.

Marine Petroleum

Dividend Yield: 8.20%

Marine Petroleum (NASDAQ: MARPS) shares currently have a dividend yield of 8.20%.

Marine Petroleum Trust, through its subsidiary, Marine Petroleum Corporation, operates as a royalty trust in the United States. The company has a P/E ratio of 12.68.

The average volume for Marine Petroleum has been 3,000 shares per day over the past 30 days. Marine Petroleum has a market cap of $34.5 million and is part of the financial services industry. Shares are up 24.9% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Marine Petroleum 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 lackluster performance in the stock itself.

Highlights from the ratings report include:
  • MARPS 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.
  • The gross profit margin for MARINE PETROLEUM TRUST is currently very high, coming in at 100.00%. MARPS has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, MARPS's net profit margin of 97.08% significantly outperformed against the industry.
  • MARINE PETROLEUM TRUST's earnings per share declined by 24.5% 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, MARINE PETROLEUM TRUST increased its bottom line by earning $1.92 versus $1.59 in the prior year.
  • MARPS, with its decline in revenue, underperformed when compared the industry average of 6.4%. Since the same quarter one year prior, revenues fell by 22.1%. 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 Oil, Gas & Consumable Fuels industry and the overall market, MARINE PETROLEUM 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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