Don't Miss Out: Top 3 Yielding Buy-Rated Stocks: RYN, AEE, PEG

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 3 stocks with substantial yields, that ultimately, we have rated "Buy."

Rayonier

Dividend Yield: 4.40%

Rayonier (NYSE: RYN) shares currently have a dividend yield of 4.40%.

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 17.58.

The average volume for Rayonier has been 1,214,500 shares per day over the past 30 days. Rayonier has a market cap of $5.6 billion and is part of the materials & construction industry. Shares are up 6.1% 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 revenue growth, notable return on equity, good cash flow from operations, increase in net income 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 7.3%. Since the same quarter one year prior, revenues rose by 19.8%. 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. 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.
  • Net operating cash flow has significantly increased by 128.63% to $210.96 million when compared to the same quarter last year. In addition, RAYONIER INC has also vastly surpassed the industry average cash flow growth rate of -59.31%.
  • 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 5.4% when compared to the same quarter one year prior, going from $75.61 million to $79.70 million.
  • RAYONIER INC has improved earnings per share by 8.5% 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, RAYONIER INC increased its bottom line by earning $2.54 versus $2.13 in the prior year. For the next year, the market is expecting a contraction of 25.2% in earnings ($1.90 versus $2.54).

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: 4.10%

Ameren (NYSE: AEE) shares currently have a dividend yield of 4.10%.

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 1,579,400 shares per day over the past 30 days. Ameren has a market cap of $9.4 billion and is part of the utilities industry. Shares are up 6.8% 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 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.
  • Despite the weak revenue results, AEE has outperformed against the industry average of 32.7%. 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.
  • 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's debt-to-equity ratio of 0.92 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.23 is very low and demonstrates very weak liquidity.

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: 4.10%

Public Service Enterprise Group (NYSE: PEG) shares currently have a dividend yield of 4.10%.

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 13.88.

The average volume for Public Service Enterprise Group has been 4,237,100 shares per day over the past 30 days. Public Service Enterprise Group has a market cap of $17.6 billion and is part of the utilities industry. Shares are up 8.3% 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, expanding profit margins, good cash flow from operations, increase in stock price during the past year 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:
  • The revenue growth greatly exceeded the industry average of 32.7%. 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. Along with this, the net profit margin of 15.27% is above that of 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. In addition, PUBLIC SERVICE ENTRP GRP INC has also vastly surpassed the industry average cash flow growth rate of -71.65%.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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.
  • PUBLIC SERVICE ENTRP GRP INC has improved earnings per share by 13.2% 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, PUBLIC SERVICE ENTRP GRP INC reported lower earnings of $2.51 versus $2.77 in the prior year. This year, the market expects an improvement in earnings ($2.53 versus $2.51).

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

Other helpful dividend tools from TheStreet:

null

More from Markets

Intel Gets a Downgrade Following CEO Resignation

Intel Gets a Downgrade Following CEO Resignation

Dow Falls Sharply as Wall Street Weighs Trump's New Trade Threats

Dow Falls Sharply as Wall Street Weighs Trump's New Trade Threats

Jim Cramer: Reports of Attempted Trade Truce With China Are False

Jim Cramer: Reports of Attempted Trade Truce With China Are False

Ford and General Motors 'Notably Vulnerable' to Trade War: Moody's

Ford and General Motors 'Notably Vulnerable' to Trade War: Moody's

Video: Here's When Investors May Start to Withstand Tough Trade Talk

Video: Here's When Investors May Start to Withstand Tough Trade Talk