3 Buy-Rated Dividend Stocks To Check Out: TAXI, PBT, UAN

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."

Medallion Financial

Dividend Yield: 7.40%

Medallion Financial (NASDAQ: TAXI) shares currently have a dividend yield of 7.40%.

Medallion Financial Corp., through its subsidiaries, operates as a specialty finance company in the United States. The company is engaged in originating, acquiring, and servicing loans that finance taxicab medallions and various types of commercial businesses. The company has a P/E ratio of 11.47.

The average volume for Medallion Financial has been 220,200 shares per day over the past 30 days. Medallion Financial has a market cap of $326.6 million and is part of the financial services industry. Shares are down 11.2% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Medallion Financial as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 8.0%. 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 MEDALLION FINANCIAL CORP is rather high; currently it is at 59.25%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 73.33% significantly outperformed against the industry average.
  • The net income growth from the same quarter one year ago has exceeded that of the Capital Markets industry average, but is less than that of the S&P 500. The net income increased by 4.5% when compared to the same quarter one year prior, going from $6.47 million to $6.77 million.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, TAXI has underperformed the S&P 500 Index, declining 5.48% from its price level of one year ago. 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.
  • MEDALLION FINANCIAL CORP's earnings per share declined by 10.0% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, MEDALLION FINANCIAL CORP reported lower earnings of $1.16 versus $1.21 in the prior year. For the next year, the market is expecting a contraction of 2.6% in earnings ($1.13 versus $1.16).

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

Permian Basin Royalty

Dividend Yield: 10.00%

Permian Basin Royalty (NYSE: PBT) shares currently have a dividend yield of 10.00%.

Permian Basin Royalty Trust owns overriding royalty interests in various oil and gas properties in the United States. The company has a P/E ratio of 15.06.

The average volume for Permian Basin Royalty has been 141,900 shares per day over the past 30 days. Permian Basin Royalty has a market cap of $673.0 million and is part of the energy industry. Shares are up 17.5% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Permian Basin Royalty as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, increase in net income and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • PBT's very impressive revenue growth greatly exceeded the industry average of 3.1%. Since the same quarter one year prior, revenues leaped by 72.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PBT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.15, which illustrates the ability to avoid short-term cash problems.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PERMIAN BASIN ROYALTY TRUST's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 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 74.7% when compared to the same quarter one year prior, rising from $6.70 million to $11.70 million.
  • The gross profit margin for PERMIAN BASIN ROYALTY TRUST is currently very high, coming in at 100.00%. PBT has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, PBT's net profit margin of 96.41% significantly outperformed against the industry.

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

CVR Partners

Dividend Yield: 8.50%

CVR Partners (NYSE: UAN) shares currently have a dividend yield of 8.50%.

CVR Partners, LP is engaged in the production, distribution, and marketing of nitrogen fertilizers in the United States. Its nitrogen fertilizer products include ammonia and urea ammonium nitrate (UAN). The company has a P/E ratio of 12.59.

The average volume for CVR Partners has been 191,100 shares per day over the past 30 days. CVR Partners has a market cap of $1.3 billion and is part of the chemicals industry. Shares are up 11.1% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates CVR Partners as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, 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:
  • UAN's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.70, which clearly demonstrates the ability to cover short-term cash needs.
  • 42.85% is the gross profit margin for CVR PARTNERS LP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, UAN's net profit margin of 26.71% significantly outperformed against the industry.
  • UAN, with its decline in revenue, underperformed when compared the industry average of 11.2%. Since the same quarter one year prior, revenues slightly dropped by 1.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Chemicals industry and the overall market, CVR PARTNERS LP's return on equity exceeds that of both the industry average and the S&P 500.
  • CVR PARTNERS LP's earnings per share declined by 40.8% 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, CVR PARTNERS LP increased its bottom line by earning $1.62 versus $1.53 in the prior year. For the next year, the market is expecting a contraction of 11.7% in earnings ($1.43 versus $1.62).

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

Dow Falls Sharply as Apple's Slump Offsets Gains in General Electric

Dow Falls Sharply as Apple's Slump Offsets Gains in General Electric

Nucor Is Waiting to See if Steel Tariffs Will Be Implemented, Jim Cramer Says

Nucor Is Waiting to See if Steel Tariffs Will Be Implemented, Jim Cramer Says

Tesla Faces Investigation After Subcontractor Is Injured on the Job

Tesla Faces Investigation After Subcontractor Is Injured on the Job

Video: Jim Cramer on Apple, Amazon, Alphabet and Nucor

Video: Jim Cramer on Apple, Amazon, Alphabet and Nucor

Jim Cramer on Apple: I Will Be Less Worried After it Reports

Jim Cramer on Apple: I Will Be Less Worried After it Reports