Best 3 Yielding Buy-Rated Stocks: LAMR, ETR, AVA

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."

Lamar Advertising

Dividend Yield: 6.60%

Lamar Advertising (NASDAQ: LAMR) shares currently have a dividend yield of 6.60%.

Lamar Advertising Company operates as an outdoor advertising company in the United States. The company has a P/E ratio of 105.58.

The average volume for Lamar Advertising has been 1,544,000 shares per day over the past 30 days. Lamar Advertising has a market cap of $4.1 billion and is part of the media industry. Shares are down 3.4% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Lamar Advertising as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, good cash flow from operations 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:
  • LAMAR ADVERTISING CO reported significant earnings per share improvement 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, LAMAR ADVERTISING CO increased its bottom line by earning $0.37 versus $0.10 in the prior year. This year, the market expects an improvement in earnings ($1.03 versus $0.37).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 52.9% when compared to the same quarter one year prior, rising from -$10.26 million to -$4.84 million.
  • LAMR's revenue growth trails the industry average of 14.9%. Since the same quarter one year prior, revenues slightly increased by 3.0%. 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 $62.58 million or 21.00% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 6.08%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.

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

Entergy

Dividend Yield: 4.20%

Entergy (NYSE: ETR) shares currently have a dividend yield of 4.20%.

Entergy Corporation, together with its subsidiaries, is engaged in the electric power production and retail electric distribution operations in the United States. It generates electricity through gas/oil, nuclear, coal, and hydro power. The company has a P/E ratio of 14.69.

The average volume for Entergy has been 1,860,500 shares per day over the past 30 days. Entergy has a market cap of $14.0 billion and is part of the utilities industry. Shares are up 22.4% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Entergy 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 increase in net income. 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 10.4%. Since the same quarter one year prior, revenues rose by 23.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • 35.35% is the gross profit margin for ENTERGY 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 12.65% is above that of the industry average.
  • Net operating cash flow has increased to $767.16 million or 41.02% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 18.17%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electric Utilities industry. The net income increased by 143.2% when compared to the same quarter one year prior, rising from $166.98 million to $406.05 million.

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

Avista

Dividend Yield: 4.10%

Avista (NYSE: AVA) shares currently have a dividend yield of 4.10%.

Avista Corporation, an energy company, is engaged in the generation, transmission, and distribution of electricity; and distribution of natural gas primarily in the United States and Canada. It operates in two segments, Avista Utilities and Ecova. The company has a P/E ratio of 16.06.

The average volume for Avista has been 406,400 shares per day over the past 30 days. Avista has a market cap of $1.9 billion and is part of the utilities industry. Shares are up 9.5% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Avista as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, growth in earnings per share, revenue growth, attractive valuation levels 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:
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
  • AVISTA CORP has improved earnings per share by 14.1% 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, AVISTA CORP increased its bottom line by earning $1.86 versus $1.32 in the prior year. This year, the market expects an improvement in earnings ($1.88 versus $1.86).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.8%. Since the same quarter one year prior, revenues slightly increased by 1.7%. 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 $156.90 million or 48.88% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 7.87%.

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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