3 Buy-Rated Dividend Stocks To Check Out: TCPC, TCAP, PDH

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."

TCP Capital

Dividend Yield: 7.90%

TCP Capital (NASDAQ: TCPC) shares currently have a dividend yield of 7.90%.

TCP Capital Corp. is a business development company specializing in direct equity and debt investments in middle-market, senior secured loans, junior loans, originated loans, mezzanine, senior debt instruments, bonds, and secondary-market investments. It seeks to invest in the United States. The company has a P/E ratio of 10.12.

The average volume for TCP Capital has been 311,100 shares per day over the past 30 days. TCP Capital has a market cap of $662.8 million and is part of the financial services industry. Shares are up 8.6% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates TCP Capital as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, expanding profit margins, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 5.2%. Since the same quarter one year prior, revenues rose by 34.4%. 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 net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income increased by 40.2% when compared to the same quarter one year prior, rising from $13.16 million to $18.45 million.
  • The gross profit margin for TCP CAPITAL CORP is currently very high, coming in at 82.14%. Regardless of TCPC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TCPC's net profit margin of 81.38% significantly outperformed against the industry.
  • 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.
  • 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. When compared to other companies in the Capital Markets industry and the overall market, TCP CAPITAL CORP's return on equity is below 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.

Triangle Capital Corporation

Dividend Yield: 7.70%

Triangle Capital Corporation (NYSE: TCAP) shares currently have a dividend yield of 7.70%.

Triangle Capital Corporation is a business development company specializing in private equity and mezzanine investments. The company has a P/E ratio of 14.04.

The average volume for Triangle Capital Corporation has been 251,100 shares per day over the past 30 days. Triangle Capital Corporation has a market cap of $787.4 million and is part of the financial services industry. Shares are up 1.6% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Triangle Capital Corporation as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, 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:
  • 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 Capital Markets industry and the overall market, TRIANGLE CAPITAL CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for TRIANGLE CAPITAL CORP is currently very high, coming in at 79.01%. Regardless of TCAP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TCAP's net profit margin of 52.00% significantly outperformed against the industry.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.2%. Since the same quarter one year prior, revenues slightly dropped by 1.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • In its most recent trading session, TCAP has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • TRIANGLE CAPITAL CORP's earnings per share declined by 32.8% 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, TRIANGLE CAPITAL CORP increased its bottom line by earning $2.94 versus $2.23 in the prior year. For the next year, the market is expecting a contraction of 27.2% in earnings ($2.14 versus $2.94).

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

PetroLogistics

Dividend Yield: 10.30%

PetroLogistics (NYSE: PDH) shares currently have a dividend yield of 10.30%.

PetroLogistics LP owns and operates propane dehydrogenation facility that produces polymer grade and chemical grade propylene from propane in North America. The company offers propylene, hydrogen, and C4 mix/C5+ streams to petrochemical industry. The company has a P/E ratio of 12.28.

The average volume for PetroLogistics has been 586,400 shares per day over the past 30 days. PetroLogistics has a market cap of $2.0 billion and is part of the chemicals industry. Shares are up 24% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates PetroLogistics 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 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:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.1%. Since the same quarter one year prior, revenues slightly increased by 5.4%. 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 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 Chemicals industry and the overall market, PETROLOGISTICS LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 70.89% to $48.56 million when compared to the same quarter last year. In addition, PETROLOGISTICS LP has also vastly surpassed the industry average cash flow growth rate of -1.65%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • PETROLOGISTICS LP's earnings per share declined by 19.5% 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, PETROLOGISTICS LP turned its bottom line around by earning $1.24 versus -$0.41 in the prior year. This year, the market expects an improvement in earnings ($1.38 versus $1.24).

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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