4 Buy-Rated Dividend Stocks Leading The Pack: ESV, VTR, APL, AYR

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."

Ensco PLC Class A

Dividend Yield: 4.80%

Ensco PLC Class A (NYSE: ESV) shares currently have a dividend yield of 4.80%.

Ensco plc provides offshore contract drilling services to the oil and gas industry worldwide. The company operates through three segments: Floaters, Jackups, and Other. The company has a P/E ratio of 11.16.

The average volume for Ensco PLC Class A has been 2,118,700 shares per day over the past 30 days. Ensco PLC Class A has a market cap of $14.5 billion and is part of the energy industry. Shares are up 4.7% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Ensco PLC Class A as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, expanding profit margins and good cash flow from operations. 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:
  • ESV's revenue growth has slightly outpaced the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 12.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.17, which illustrates the ability to avoid short-term cash problems.
  • ENSCO PLC's earnings per share improvement from the most recent quarter was slightly positive. 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, ENSCO PLC increased its bottom line by earning $5.24 versus $2.91 in the prior year. This year, the market expects an improvement in earnings ($6.28 versus $5.24).
  • The gross profit margin for ENSCO PLC is rather high; currently it is at 51.10%. Regardless of ESV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ESV's net profit margin of 29.91% significantly outperformed against the industry.
  • Net operating cash flow has increased to $648.20 million or 12.33% when compared to the same quarter last year. Despite an increase in cash flow, ENSCO PLC's cash flow growth rate is still lower than the industry average growth rate of 29.97%.

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

Ventas

Dividend Yield: 4.40%

Ventas (NYSE: VTR) shares currently have a dividend yield of 4.40%.

Ventas, Inc. is a publicly owned real estate investment trust. The firm engages in investment, management, financing, and leasing of properties in the healthcare industry. It invests in the real estate markets of the United States and Canada. The company has a P/E ratio of 37.35.

The average volume for Ventas has been 1,494,500 shares per day over the past 30 days. Ventas has a market cap of $17.8 billion and is part of the real estate industry. Shares are down 6% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Ventas as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • VTR's revenue growth has slightly outpaced the industry average of 8.3%. Since the same quarter one year prior, revenues slightly increased by 8.7%. 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 increased to $327.74 million or 31.88% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.77%.
  • VENTAS INC has improved earnings per share by 10.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VENTAS INC reported lower earnings of $1.04 versus $1.41 in the prior year. This year, the market expects an improvement in earnings ($1.56 versus $1.04).
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry average. The net income increased by 5.7% when compared to the same quarter one year prior, going from $111.88 million to $118.30 million.

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: 6.80%

Atlas Pipeline Partners (NYSE: APL) shares currently have a dividend yield of 6.80%.

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 390,400 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 14.9% year to date as of the close of trading on Thursday.

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 somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • APL's very impressive revenue growth greatly exceeded the industry average of 5.5%. Since the same quarter one year prior, revenues leaped by 97.2%. 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 $79.40 million or 30.18% 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 -20.04%.
  • 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.
  • APL's debt-to-equity ratio of 0.73 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.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ATLAS PIPELINE PARTNER LP's return on equity significantly trails 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.

Aircastle

Dividend Yield: 4.20%

Aircastle (NYSE: AYR) shares currently have a dividend yield of 4.20%.

Aircastle Limited engages in the acquisition, lease, and sale of commercial jet aircraft to passenger and cargo airlines worldwide. The company also makes investments in various aviation assets, including debt investments secured by commercial jet aircraft. The company has a P/E ratio of 118.19.

The average volume for Aircastle has been 568,200 shares per day over the past 30 days. Aircastle has a market cap of $1.5 billion and is part of the diversified services industry. Shares are up 50.8% year to date as of the close of trading on Thursday.

TheStreet Ratings rates Aircastle as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.7%. Since the same quarter one year prior, revenues slightly increased by 0.8%. 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 $125.87 million or 10.56% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -0.40%.
  • The gross profit margin for AIRCASTLE LTD is currently very high, coming in at 91.25%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -44.25% is in-line with the industry average.
  • Compared to its closing price of one year ago, AYR's share price has jumped by 58.64%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.
  • AIRCASTLE LTD's earnings per share declined by 46.1% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, AIRCASTLE LTD reported lower earnings of $0.46 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($1.50 versus $0.46).

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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