3 Buy-Rated Dividend Stocks Taking The Lead: RGP, TE, BPL

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 which could 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."

Regency Energy Partners

Dividend Yield: 7.00%

Regency Energy Partners (NYSE: RGP) shares currently have a dividend yield of 7.00%.

Regency Energy Partners LP is engaged in the gathering and processing, compression, treating, and transportation of natural gas; and the transportation, fractionation, and storage of natural gas liquids (NGLs). The company has a P/E ratio of 119.78.

The average volume for Regency Energy Partners has been 952,400 shares per day over the past 30 days. Regency Energy Partners has a market cap of $9.8 billion and is part of the energy industry. Shares are up 5.2% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Regency Energy Partners as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • RGP's very impressive revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues leaped by 59.8%. 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 Oil, Gas & Consumable Fuels industry. The net income increased by 131.0% when compared to the same quarter one year prior, rising from -$29.00 million to $9.00 million.
  • REGENCY ENERGY PARTNERS 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, REGENCY ENERGY PARTNERS LP reported lower earnings of $0.03 versus $0.13 in the prior year. This year, the market expects an improvement in earnings ($0.54 versus $0.03).
  • RGP's debt-to-equity ratio of 0.63 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.
  • 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, REGENCY ENERGY PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.

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

TECO Energy

Dividend Yield: 5.10%

TECO Energy (NYSE: TE) shares currently have a dividend yield of 5.10%.

TECO Energy, Inc., an electric and gas utility holding company, is engaged in the regulated electric and gas utility operations. The company has a P/E ratio of 18.00.

The average volume for TECO Energy has been 2,122,800 shares per day over the past 30 days. TECO Energy has a market cap of $3.7 billion and is part of the utilities industry. Shares are down 1.9% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates TECO Energy as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, growth in earnings per share 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:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 3.5%. 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 $186.90 million or 18.36% when compared to the same quarter last year. In addition, TECO ENERGY INC has also modestly surpassed the industry average cash flow growth rate of 9.73%.
  • TECO ENERGY INC has improved earnings per share by 15.8% 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, TECO ENERGY INC reported lower earnings of $0.92 versus $1.13 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $0.92).
  • The net income growth from the same quarter one year ago has exceeded that of the Multi-Utilities industry average, but is less than that of the S&P 500. The net income increased by 20.7% when compared to the same quarter one year prior, going from $41.50 million to $50.10 million.
  • The gross profit margin for TECO ENERGY INC is currently lower than what is desirable, coming in at 28.94%. Regardless of TE's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.32% trails the industry average.

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

Buckeye Partners

Dividend Yield: 5.60%

Buckeye Partners (NYSE: BPL) shares currently have a dividend yield of 5.60%.

Buckeye Partners, L.P. owns and operates liquid petroleum products pipeline systems in the United States. The company operates through four segments: Pipelines & Terminals, Global Marine Terminals, Merchant Services, and Development & Logistics. The company has a P/E ratio of 24.48.

The average volume for Buckeye Partners has been 313,400 shares per day over the past 30 days. Buckeye Partners has a market cap of $9.1 billion and is part of the energy industry. Shares are up 10.7% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Buckeye Partners as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, growth in earnings per share and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 48.1%. 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 Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 1.3% when compared to the same quarter one year prior, going from $89.34 million to $90.47 million.
  • BUCKEYE PARTNERS LP's earnings per share improvement from the most recent quarter was slightly positive. 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, BUCKEYE PARTNERS LP increased its bottom line by earning $3.23 versus $2.31 in the prior year. This year, the market expects an improvement in earnings ($3.73 versus $3.23).
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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 gross profit margin for BUCKEYE PARTNERS LP is currently extremely low, coming in at 10.12%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.54% trails that of the industry average.

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

5 Stocks That Are Screaming Buys Right Now

5 Stocks That Are Screaming Buys Right Now

General Electric Booted From Dow, Replaced by Walgreens

General Electric Booted From Dow, Replaced by Walgreens

European Union Says Tariffs on U.S. Imports Will Kick In on June 22

European Union Says Tariffs on U.S. Imports Will Kick In on June 22

Stocks Rise, GE Dropped From the Dow, Starbucks, Oracle - 5 Things You Must Know

Stocks Rise, GE Dropped From the Dow, Starbucks, Oracle - 5 Things You Must Know

Global Stocks Rebound But US-China Trade War Concerns Keep Investors on Edge

Global Stocks Rebound But US-China Trade War Concerns Keep Investors on Edge