Buy-Rated Dividend Stocks: Top 5 Companies: VLY, MAA, HCP, TOT, CVI

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."

Valley National Bancorp

Dividend Yield: 4.30%

Valley National Bancorp (NYSE: VLY) shares currently have a dividend yield of 4.30%.

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 15.62.

The average volume for Valley National Bancorp has been 1,160,000 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 8.8% year-to-date as of the close of trading on Monday.

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, expanding profit margins and increase in stock price during the past year. 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 increased to $89.13 million or 21.57% when compared to the same quarter last year. Despite an increase in cash flow of 21.57%, VALLEY NATIONAL BANCORP is still growing at a significantly lower rate than the industry average of 74.04%.
  • The gross profit margin for VALLEY NATIONAL BANCORP is currently very high, coming in at 73.07%. Regardless of VLY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VLY's net profit margin of 15.39% is significantly lower than the industry average.
  • VLY, with its decline in revenue, underperformed when compared the industry average of 3.1%. Since the same quarter one year prior, revenues fell by 15.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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, 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.
  • VALLEY NATIONAL BANCORP's earnings per share declined by 30.0% in the most recent quarter compared to 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, VALLEY NATIONAL BANCORP reported lower earnings of $0.74 versus $0.76 in the prior year. For the next year, the market is expecting a contraction of 18.4% in earnings ($0.61 versus $0.74).

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

Mid-America Apartment Communities

Dividend Yield: 4.60%

Mid-America Apartment Communities (NYSE: MAA) shares currently have a dividend yield of 4.60%.

Mid-America Apartment Communities, Inc. is an independent real estate investment trust. The firm invests in the real estate markets of the United States. It is engaged in acquisition, redevelopment, new development, property management, and disposition of multifamily apartment communities. The company has a P/E ratio of 34.42.

The average volume for Mid-America Apartment Communities has been 760,800 shares per day over the past 30 days. Mid-America Apartment Communities has a market cap of $4.5 billion and is part of the real estate industry. Shares are down 7% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Mid-America Apartment Communities as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, compelling growth in net income, good cash flow from operations 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:
  • MAA's revenue growth has slightly outpaced the industry average of 9.5%. Since the same quarter one year prior, revenues rose by 10.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MID-AMERICA APT CMNTYS INC has improved earnings per share by 8.6% 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, MID-AMERICA APT CMNTYS INC increased its bottom line by earning $1.45 versus $0.88 in the prior year. This year, the market expects an improvement in earnings ($2.76 versus $1.45).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 43.5% when compared to the same quarter one year prior, rising from $30.85 million to $44.26 million.
  • Net operating cash flow has slightly increased to $59.40 million or 1.95% when compared to the same quarter last year. Despite an increase in cash flow, MID-AMERICA APT CMNTYS INC's average is still marginally south of the industry average growth rate of 8.44%.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, MID-AMERICA APT CMNTYS INC'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.

HCP

Dividend Yield: 5.70%

HCP (NYSE: HCP) shares currently have a dividend yield of 5.70%.

HCP, Inc. is an independent hybrid real estate investment trust. The fund invests in real estate markets of the United States. The company has a P/E ratio of 18.95.

The average volume for HCP has been 2,795,500 shares per day over the past 30 days. HCP has a market cap of $16.8 billion and is part of the real estate industry. Shares are down 18.6% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates HCP as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, 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:
  • HCP's revenue growth has slightly outpaced the industry average of 9.5%. Since the same quarter one year prior, revenues rose by 15.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HCP INC has improved earnings per share by 9.1% 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, HCP INC increased its bottom line by earning $1.79 versus $1.27 in the prior year. This year, the market expects an improvement in earnings ($1.97 versus $1.79).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry average. The net income increased by 19.2% when compared to the same quarter one year prior, going from $196.11 million to $233.76 million.
  • Net operating cash flow has increased to $272.08 million or 14.60% when compared to the same quarter last year. In addition, HCP INC has also modestly surpassed the industry average cash flow growth rate of 8.44%.
  • The gross profit margin for HCP INC is rather high; currently it is at 59.33%. Regardless of HCP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HCP's net profit margin of 41.90% 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.

Total

Dividend Yield: 4.40%

Total (NYSE: TOT) shares currently have a dividend yield of 4.40%.

TOTAL S.A., together with its subsidiaries, operates as a oil and gas company worldwide. The company operates in three segments: Upstream, Refining and Chemicals, and Marketing and Services. The company has a P/E ratio of 7.16.

The average volume for Total has been 1,144,800 shares per day over the past 30 days. Total has a market cap of $136.8 billion and is part of the energy industry. Shares are up 16% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Total 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, 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 disappointing return on equity.

Highlights from the ratings report include:
  • TOT's revenue growth has slightly outpaced the industry average of 5.4%. Since the same quarter one year prior, revenues slightly increased by 2.0%. 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 $9,802.00 million or 43.04% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 1.02%.
  • 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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • TOTAL SA' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, TOTAL SA reported lower earnings of $6.18 versus $7.05 in the prior year. This year, the market expects an improvement in earnings ($6.42 versus $6.18).

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

CVR Energy

Dividend Yield: 7.60%

CVR Energy (NYSE: CVI) shares currently have a dividend yield of 7.60%.

CVR Energy, Inc., through its subsidiaries, engages in petroleum refining and nitrogen fertilizer manufacturing activities in the United States. The company operates through two segments, Petroleum and Nitrogen Fertilizer. The company has a P/E ratio of 7.91.

The average volume for CVR Energy has been 555,500 shares per day over the past 30 days. CVR Energy has a market cap of $3.4 billion and is part of the energy industry. Shares are down 19.1% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates CVR Energy as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, 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:
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CVR ENERGY INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.53, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that CVI's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.97 is high and demonstrates strong liquidity.
  • CVI, with its decline in revenue, underperformed when compared the industry average of 5.4%. Since the same quarter one year prior, revenues fell by 17.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • CVR ENERGY INC has experienced 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 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, CVR ENERGY INC increased its bottom line by earning $4.33 versus $3.94 in the prior year. For the next year, the market is expecting a contraction of 11.1% in earnings ($3.85 versus $4.33).

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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