Top 5 Yielding Buy-Rated Stocks: TLLP, PAA, GSK, CPWR, 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 5 stocks with substantial yields, that ultimately, we have rated "Buy."

Tesoro Logistics

Dividend Yield: 4.10%

Tesoro Logistics (NYSE: TLLP) shares currently have a dividend yield of 4.10%.

Tesoro Logistics LP engages in the ownership, operation, development, and acquisition of logistics assets related to crude oil and refined products in the United States. The company operates in two segments, Crude Oil Gathering; and Terminalling, Transportation, and Storage. The company has a P/E ratio of 31.09.

The average volume for Tesoro Logistics has been 417,600 shares per day over the past 30 days. Tesoro Logistics has a market cap of $1.7 billion and is part of the energy industry. Shares are up 1% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Tesoro Logistics as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • TLLP's very impressive revenue growth greatly exceeded the industry average of 5.6%. Since the same quarter one year prior, revenues leaped by 113.3%. 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.
  • In comparison to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, TESORO LOGISTICS LP has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 27.3% when compared to the same quarter one year prior, rising from $16.54 million to $21.05 million.
  • Net operating cash flow has significantly increased by 51.45% to $37.40 million when compared to the same quarter last year. In addition, TESORO LOGISTICS LP has also vastly surpassed the industry average cash flow growth rate of 0.96%.
  • The gross profit margin for TESORO LOGISTICS LP is rather high; currently it is at 57.51%. Regardless of TLLP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TLLP's net profit margin of 22.45% 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.

Plains All American Pipeline

Dividend Yield: 4.70%

Plains All American Pipeline (NYSE: PAA) shares currently have a dividend yield of 4.70%.

Plains All American Pipeline, L.P., through its subsidiaries, engages in the transportation, storage, terminalling, and marketing of crude oil and refined products in the United States and Canada. The company operates in three segments: Transportation, Facilities, and Supply and Logistics. The company has a P/E ratio of 17.46.

The average volume for Plains All American Pipeline has been 1,217,400 shares per day over the past 30 days. Plains All American Pipeline has a market cap of $17.5 billion and is part of the energy industry. Shares are down 2.1% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Plains All American Pipeline as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, reasonable valuation levels, notable return on equity and increase in stock price during the past year. 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:
  • The revenue growth came in higher than the industry average of 5.6%. Since the same quarter one year prior, revenues rose by 14.4%. 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 40.0% when compared to the same quarter one year prior, rising from $165.00 million to $231.00 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, PLAINS ALL AMER PIPELNE -LP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • 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.

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

GlaxoSmithKline

Dividend Yield: 4.60%

GlaxoSmithKline (NYSE: GSK) shares currently have a dividend yield of 4.60%.

GlaxoSmithKline plc, together with its subsidiaries, discovers, develops, manufactures, and markets pharmaceutical products, over-the-counter medicines, and health-related consumer products worldwide. The company has a P/E ratio of 15.98.

The average volume for GlaxoSmithKline has been 2,295,100 shares per day over the past 30 days. GlaxoSmithKline has a market cap of $128.8 billion and is part of the drugs industry. Shares are down 1.2% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates GlaxoSmithKline as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, increase in stock price during the past year, 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:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 2.5%. Since the same quarter one year prior, revenues slightly increased by 1.1%. 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.
  • Net operating cash flow has significantly increased by 1166.38% to $3,647.01 million when compared to the same quarter last year. In addition, GLAXOSMITHKLINE PLC has also vastly surpassed the industry average cash flow growth rate of 29.85%.
  • 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.
  • The gross profit margin for GLAXOSMITHKLINE PLC is rather high; currently it is at 68.78%. Regardless of GSK'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 14.80% trails the industry average.
  • GLAXOSMITHKLINE PLC's earnings per share declined by 7.8% 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 year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, GLAXOSMITHKLINE PLC reported lower earnings of $2.94 versus $3.21 in the prior year. This year, the market expects an improvement in earnings ($3.68 versus $2.94).

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

Compuware Corporation

Dividend Yield: 4.50%

Compuware Corporation (NASDAQ: CPWR) shares currently have a dividend yield of 4.50%.

Compuware Corporation provides services, software, and practices for information technology (IT) organizations worldwide.

The average volume for Compuware Corporation has been 2,107,000 shares per day over the past 30 days. Compuware Corporation has a market cap of $2.4 billion and is part of the computer software & services industry. Shares are down 1% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Compuware Corporation as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, good cash flow from operations, growth in earnings per share 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:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 54.2% when compared to the same quarter one year prior, rising from $10.59 million to $16.34 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.5%. Since the same quarter one year prior, revenues slightly increased by 3.4%. 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 -$1.57 million or 13.14% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.60%.
  • COMPUWARE CORP has improved earnings per share by 40.0% 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, COMPUWARE CORP swung to a loss, reporting -$0.08 versus $0.40 in the prior year. This year, the market expects an improvement in earnings ($0.49 versus -$0.08).
  • CPWR's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.98 is somewhat weak and could be cause for future problems.

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 27.18.

The average volume for Senior Housing Properties has been 1,316,900 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 1% 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, increase in net income, reasonable valuation levels, good cash flow from operations 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 9.6%. 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 8.55%.
  • 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 ($0.81 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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