Buy-Rated Dividend Stocks In The Top 4: OLP, ARI, QRE, HTGC

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."

One Liberty Properties

Dividend Yield: 7.20%

One Liberty Properties (NYSE: OLP) shares currently have a dividend yield of 7.20%.

One Liberty Properties, Inc., a real estate investment trust (REIT), engages in the acquisition, ownership, and management of commercial real estate properties in the United States. The company has a P/E ratio of 18.78.

The average volume for One Liberty Properties has been 34,500 shares per day over the past 30 days. One Liberty Properties has a market cap of $323.2 million and is part of the real estate industry. Shares are up 2.7% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates One Liberty Properties 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, 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:
  • OLP's revenue growth has slightly outpaced the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 15.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Net operating cash flow has increased to $6.46 million or 27.28% when compared to the same quarter last year. In addition, ONE LIBERTY PROPERTIES INC has also vastly surpassed the industry average cash flow growth rate of -56.67%.
  • The gross profit margin for ONE LIBERTY PROPERTIES INC is rather high; currently it is at 51.88%. Regardless of OLP'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 24.06% trails the industry average.
  • ONE LIBERTY PROPERTIES INC reported flat earnings per share in the most recent quarter. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, ONE LIBERTY PROPERTIES INC's EPS of $0.80 remained unchanged from the prior years' EPS of $0.80.

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

Apollo Commercial Real Estate Finance

Dividend Yield: 9.80%

Apollo Commercial Real Estate Finance (NYSE: ARI) shares currently have a dividend yield of 9.80%.

Apollo Commercial Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. The company has a P/E ratio of 14.92.

The average volume for Apollo Commercial Real Estate Finance has been 216,600 shares per day over the past 30 days. Apollo Commercial Real Estate Finance has a market cap of $599.7 million and is part of the real estate industry. Shares are up 1.1% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Apollo Commercial Real Estate Finance as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 31.1%. 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.
  • The gross profit margin for APOLLO COMMERCIAL RE FIN INC is currently very high, coming in at 77.54%. Regardless of ARI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ARI's net profit margin of 65.56% significantly outperformed against the industry.
  • The net income growth from the same quarter one year ago has exceeded that of the Real Estate Investment Trusts (REITs) industry average, but is less than that of the S&P 500. The net income increased by 5.6% when compared to the same quarter one year prior, going from $12.21 million to $12.90 million.
  • APOLLO COMMERCIAL RE FIN INC's earnings per share declined by 44.2% in the most recent quarter compared to 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, APOLLO COMMERCIAL RE FIN INC increased its bottom line by earning $1.68 versus $1.34 in the prior year. For the next year, the market is expecting a contraction of 13.4% in earnings ($1.46 versus $1.68).
  • The share price of APOLLO COMMERCIAL RE FIN INC has not done very well: it is down 7.41% 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.

QR Energy

Dividend Yield: 11.20%

QR Energy (NYSE: QRE) shares currently have a dividend yield of 11.20%.

QR Energy, LP, through its subsidiary, QRE Operating, LLC, engages in the acquisition, exploitation, development, and production of oil and natural gas properties in the United States.

The average volume for QR Energy has been 275,800 shares per day over the past 30 days. QR Energy has a market cap of $917.2 million and is part of the energy industry. Shares are up 2% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates QR Energy as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, expanding profit margins and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 38.3%. 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 51.4% when compared to the same quarter one year prior, rising from -$44.66 million to -$21.72 million.
  • Net operating cash flow has significantly increased by 91.85% to $48.60 million when compared to the same quarter last year. In addition, QR ENERGY LP has also vastly surpassed the industry average cash flow growth rate of -48.26%.
  • The gross profit margin for QR ENERGY LP is rather high; currently it is at 62.50%. 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 -17.23% is in-line with the industry average.
  • QR ENERGY LP reported significant earnings per share improvement 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, QR ENERGY LP swung to a loss, reporting -$0.15 versus $0.35 in the prior year. This year, the market expects an improvement in earnings ($1.18 versus -$0.15).

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

Hercules Technology Growth Capital

Dividend Yield: 7.90%

Hercules Technology Growth Capital (NYSE: HTGC) shares currently have a dividend yield of 7.90%.

Hercules Technology Growth Capital, Inc. is a private equity, venture capital, and venture debt firm specializing in providing debt and equity to privately held venture capital and private equity backed companies and select publicly-traded companies. The company has a P/E ratio of 9.13.

The average volume for Hercules Technology Growth Capital has been 514,100 shares per day over the past 30 days. Hercules Technology Growth Capital has a market cap of $969.9 million and is part of the real estate industry. Shares are down 3.1% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Hercules Technology Growth Capital as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, attractive valuation levels, solid stock price performance and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • HTGC's very impressive revenue growth greatly exceeded the industry average of 16.8%. Since the same quarter one year prior, revenues leaped by 71.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Capital Markets industry and the overall market, HERCULES TECH GROWTH CAP INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • Powered by its strong earnings growth of 555.55% and other important driving factors, this stock has surged by 28.03% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HTGC should continue to move higher despite the fact that it has already enjoyed a very nice gain 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 Capital Markets industry. The net income increased by 679.4% when compared to the same quarter one year prior, rising from $4.75 million to $36.98 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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