What To Buy: Top 4 Buy-Rated Dividend Stocks: WMB, ETP, CPT, SNH

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."

Williams Companies

Dividend Yield: 4.20%

Williams Companies (NYSE: WMB) shares currently have a dividend yield of 4.20%.

The Williams Companies, Inc. operates as an energy infrastructure company. The company has a P/E ratio of 41.22.

The average volume for Williams Companies has been 5,560,700 shares per day over the past 30 days. Williams Companies has a market cap of $24.8 billion and is part of the energy industry. Shares are up 12.3% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Williams Companies 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 $539.00 million or 25.05% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 1.02%.
  • 39.93% is the gross profit margin for WILLIAMS COS INC which we consider to be strong. Regardless of WMB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WMB's net profit margin of 8.68% compares favorably to the industry average.
  • WMB, with its decline in revenue, slightly underperformed the industry average of 5.4%. Since the same quarter one year prior, revenues slightly dropped by 7.4%. 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.
  • The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 9.0% when compared to the same quarter one year ago, dropping from $155.00 million to $141.00 million.

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

Energy Transfer Partners L.P

Dividend Yield: 6.70%

Energy Transfer Partners L.P (NYSE: ETP) shares currently have a dividend yield of 6.70%.

Energy Transfer Partners, L.P. engages in the natural gas midstream, and intrastate transportation and storage businesses in the United States. The company has a P/E ratio of 37.46.

The average volume for Energy Transfer Partners L.P has been 935,600 shares per day over the past 30 days. Energy Transfer Partners L.P has a market cap of $20.7 billion and is part of the energy industry. Shares are up 26.5% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Energy Transfer Partners L.P 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, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • ETP's very impressive revenue growth greatly exceeded the industry average of 5.4%. Since the same quarter one year prior, revenues leaped by 560.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • 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 886.1% when compared to the same quarter one year prior, rising from $36.00 million to $355.00 million.
  • Net operating cash flow has significantly increased by 70.78% to $578.00 million when compared to the same quarter last year. In addition, ENERGY TRANSFER PARTNERS -LP has also vastly surpassed the industry average cash flow growth rate of 1.02%.
  • ENERGY TRANSFER PARTNERS -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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ENERGY TRANSFER PARTNERS -LP increased its bottom line by earning $5.76 versus $2.17 in the prior year. For the next year, the market is expecting a contraction of 60.0% in earnings ($2.31 versus $5.76).

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

Camden Property

Dividend Yield: 4.30%

Camden Property (NYSE: CPT) shares currently have a dividend yield of 4.30%.

Camden Property Trust is an independent real estate investment trust. The firm invests in the real estate markets of the United States. It is engaged in the ownership, development, acquisition, management, and disposition of multifamily residential apartment communities. The company has a P/E ratio of 29.83.

The average volume for Camden Property has been 586,600 shares per day over the past 30 days. Camden Property has a market cap of $5.0 billion and is part of the real estate industry. Shares are down 11.2% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Camden Property as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • CPT's revenue growth has slightly outpaced the industry average of 9.5%. Since the same quarter one year prior, revenues slightly increased by 9.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CAMDEN PROPERTY TRUST has improved earnings per share by 25.8% 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, CAMDEN PROPERTY TRUST increased its bottom line by earning $1.82 versus $0.17 in the prior year. This year, the market expects an improvement in earnings ($2.76 versus $1.82).
  • 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 130.3% when compared to the same quarter one year prior, rising from $30.70 million to $70.72 million.
  • Net operating cash flow has increased to $128.58 million or 17.81% when compared to the same quarter last year. In addition, CAMDEN PROPERTY TRUST has also modestly surpassed the industry average cash flow growth rate of 8.44%.

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

Senior Housing Properties

Dividend Yield: 7.00%

Senior Housing Properties (NYSE: SNH) shares currently have a dividend yield of 7.00%.

Senior Housing Properties Trust, a real estate investment trust (REIT), primarily invests in senior housing properties in the United States. The trust invests in hospitals, nursing homes, senior apartments, independent living properties, and assisted living properties. The company has a P/E ratio of 27.16.

The average volume for Senior Housing Properties has been 1,460,200 shares per day over the past 30 days. Senior Housing Properties has a market cap of $4.2 billion and is part of the real estate industry. Shares are down 5.8% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Senior Housing Properties as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, increase in net income, good cash flow from operations and growth in earnings per share. 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:
  • The revenue growth came in higher than the industry average of 9.5%. Since the same quarter one year prior, revenues rose by 19.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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 Real Estate Investment Trusts (REITs) industry. The net income increased by 48.7% when compared to the same quarter one year prior, rising from $25.65 million to $38.12 million.
  • Net operating cash flow has slightly increased to $97.25 million or 5.15% when compared to the same quarter last year. Despite an increase in cash flow, SENIOR HOUSING PPTYS TRUST's average is still marginally south of the industry average growth rate of 8.44%.
  • SENIOR HOUSING PPTYS TRUST has improved earnings per share by 42.9% 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, SENIOR HOUSING PPTYS TRUST reported lower earnings of $0.78 versus $1.02 in the prior year. This year, the market expects an improvement in earnings ($0.83 versus $0.78).

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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