Top 5 Yielding Buy-Rated Stocks: RYN, TAL, PEG, AEE, SSS

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."

Rayonier

Dividend Yield: 4.70%

Rayonier (NYSE: RYN) shares currently have a dividend yield of 4.70%.

Rayonier, Inc. engages in the sale and development of real estate and timberland management, as well as in the production and sale of cellulose fibers in the United States, New Zealand, and Australia. The company has a P/E ratio of 16.59.

The average volume for Rayonier has been 1,281,600 shares per day over the past 30 days. Rayonier has a market cap of $5.3 billion and is part of the materials & construction industry. Shares are down 2.2% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Rayonier as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity 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:
  • 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. In comparison to the other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, RAYONIER INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • 39.19% is the gross profit margin for RAYONIER INC which we consider to be strong. Regardless of RYN'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 14.90% trails the industry average.
  • RAYONIER INC's earnings per share declined by 27.9% 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, RAYONIER INC reported lower earnings of $2.13 versus $2.20 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus $2.13).
  • RYN, with its decline in revenue, slightly underperformed the industry average of 9.6%. Since the same quarter one year prior, revenues slightly dropped by 0.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The share price of RAYONIER INC has not done very well: it is down 24.22% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

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

TAL International Group

Dividend Yield: 6.20%

TAL International Group (NYSE: TAL) shares currently have a dividend yield of 6.20%.

TAL International Group, Inc. engages in leasing intermodal containers and chassis worldwide. The company operates in two segments, Equipment Leasing and Equipment Trading. The company has a P/E ratio of 10.42.

The average volume for TAL International Group has been 537,400 shares per day over the past 30 days. TAL International Group has a market cap of $1.5 billion and is part of the diversified services industry. Shares are down 22.8% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates TAL International Group as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, attractive valuation levels, growth in earnings per share and good cash flow from operations. 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:
  • TAL INTERNATIONAL GROUP INC has improved earnings per share by 10.8% 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, TAL INTERNATIONAL GROUP INC increased its bottom line by earning $3.87 versus $3.36 in the prior year. This year, the market expects an improvement in earnings ($4.16 versus $3.87).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 6.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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 Trading Companies & Distributors industry and the overall market, TAL INTERNATIONAL GROUP INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $116.24 million or 38.48% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 4.16%.

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

Public Service Enterprise Group

Dividend Yield: 4.40%

Public Service Enterprise Group (NYSE: PEG) shares currently have a dividend yield of 4.40%.

Public Service Enterprise Group Incorporated, through its subsidiaries, operates as an energy company primarily in the northeastern and mid Atlantic United States. The company has a P/E ratio of 13.10.

The average volume for Public Service Enterprise Group has been 4,095,700 shares per day over the past 30 days. Public Service Enterprise Group has a market cap of $16.6 billion and is part of the utilities industry. Shares are up 3.1% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Public Service Enterprise Group as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, expanding profit margins, good cash flow from operations 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:
  • PEG's revenue growth has slightly outpaced the industry average of 0.3%. Since the same quarter one year prior, revenues slightly increased by 6.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 40.13% is the gross profit margin for PUBLIC SERVICE ENTRP GRP INC which we consider to be strong. 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 15.27% trails the industry average.
  • Net operating cash flow has increased to $1,092.00 million or 17.04% when compared to the same quarter last year. Despite an increase in cash flow, PUBLIC SERVICE ENTRP GRP INC's average is still marginally south of the industry average growth rate of 26.60%.
  • The debt-to-equity ratio is somewhat low, currently at 0.75, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.47 is very weak and demonstrates a lack of ability to pay short-term obligations.

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

Ameren

Dividend Yield: 4.40%

Ameren (NYSE: AEE) shares currently have a dividend yield of 4.40%.

Ameren Corporation operates as a public utility holding company in the United States. The company is engaged in rate-regulated electric generation, transmission, and distribution businesses; and rate-regulated natural gas transmission and distribution businesses.

The average volume for Ameren has been 1,446,700 shares per day over the past 30 days. Ameren has a market cap of $8.8 billion and is part of the utilities industry. Shares are down 0.7% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Ameren as a buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • 45.30% is the gross profit margin for AMEREN CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.43% is above that of the industry average.
  • 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 debt-to-equity ratio is somewhat low, currently at 0.92, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.23 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • AMEREN CORP' 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, AMEREN CORP swung to a loss, reporting -$2.67 versus $2.14 in the prior year. This year, the market expects an improvement in earnings ($2.06 versus -$2.67).
  • AEE, with its decline in revenue, slightly underperformed the industry average of 0.3%. Since the same quarter one year prior, revenues slightly dropped by 4.2%. The declining revenue appears to have seeped down to the company's 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.

Sovran Self Storage

Dividend Yield: 4.30%

Sovran Self Storage (NYSE: SSS) shares currently have a dividend yield of 4.30%.

Sovran Self Storage, Inc. operates as a real estate investment trust (REIT). It engages in the acquisition, ownership, and management of self-storage properties in the United States. The company has a P/E ratio of 30.14.

The average volume for Sovran Self Storage has been 177,700 shares per day over the past 30 days. Sovran Self Storage has a market cap of $2.0 billion and is part of the real estate industry. Shares are down 2.8% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Sovran Self Storage as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, expanding profit margins, good cash flow from operations 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:
  • SSS's revenue growth has slightly outpaced the industry average of 9.6%. Since the same quarter one year prior, revenues rose by 15.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SOVRAN SELF STORAGE INC has improved earnings per share by 31.9% 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, SOVRAN SELF STORAGE INC increased its bottom line by earning $1.64 versus $0.98 in the prior year. This year, the market expects an improvement in earnings ($2.29 versus $1.64).
  • 38.74% is the gross profit margin for SOVRAN SELF STORAGE INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.49% is above that of the industry average.
  • Net operating cash flow has increased to $36.46 million or 26.52% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 8.45%.
  • 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 4.6% when compared to the same quarter one year prior, going from $18.81 million to $19.68 million.

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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