3 Buy-Rated Dividend Stocks To Check Out: BCE, ORI, NHI

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."

BCE

Dividend Yield: 5.10%

BCE (NYSE: BCE) shares currently have a dividend yield of 5.10%.

BCE Inc., a communications company, provides broadband communication services to residential and business customers in Canada. The company operates through four segments: Bell Wireline, Bell Wireless, Bell Media, and Bell Aliant. The company has a P/E ratio of 19.10.

The average volume for BCE has been 540,600 shares per day over the past 30 days. BCE has a market cap of $34.9 billion and is part of the telecommunications industry. Shares are up 4.6% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates BCE as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, growth in earnings per share, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • BCE's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 3.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 48.38% is the gross profit margin for BCE INC which we consider to be strong. Regardless of BCE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BCE's net profit margin of 12.70% compares favorably to the industry average.
  • BCE INC has improved earnings per share by 8.2% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, BCE INC reported lower earnings of $2.54 versus $3.17 in the prior year.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 8.2% when compared to the same quarter one year prior, going from $599.00 million to $648.00 million.
  • 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that 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.

Old Republic International Corporation

Dividend Yield: 4.50%

Old Republic International Corporation (NYSE: ORI) shares currently have a dividend yield of 4.50%.

Old Republic International Corporation, through its subsidiaries, is engaged in underwriting insurance products primarily in the United States and Canada. The company has a P/E ratio of 8.05.

The average volume for Old Republic International Corporation has been 1,236,600 shares per day over the past 30 days. Old Republic International Corporation has a market cap of $4.3 billion and is part of the insurance industry. Shares are down 4.9% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Old Republic International Corporation 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, attractive valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • ORI's revenue growth has slightly outpaced the industry average of 7.8%. Since the same quarter one year prior, revenues rose by 12.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ORI's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • 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 Insurance industry and the overall market, OLD REPUBLIC INTL CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 219.04% and other important driving factors, this stock has surged by 27.73% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ORI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

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

National Health Investors

Dividend Yield: 5.00%

National Health Investors (NYSE: NHI) shares currently have a dividend yield of 5.00%.

National Health Investors, Inc., a real estate investment trust (REIT), invests in health care properties, primarily in the long-term care industry in the United States. The company has a P/E ratio of 20.77.

The average volume for National Health Investors has been 151,500 shares per day over the past 30 days. National Health Investors has a market cap of $2.0 billion and is part of the real estate industry. Shares are up 10.2% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates National Health Investors as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • NHI's very impressive revenue growth greatly exceeded the industry average of 10.3%. Since the same quarter one year prior, revenues leaped by 59.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NATIONAL HEALTH INVESTORS has improved earnings per share by 42.0% 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, NATIONAL HEALTH INVESTORS increased its bottom line by earning $2.73 versus $2.61 in the prior year. This year, the market expects an improvement in earnings ($3.23 versus $2.73).
  • 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 Real Estate Investment Trusts (REITs) industry average. The net income increased by 49.5% when compared to the same quarter one year prior, rising from $15.74 million to $23.53 million.
  • The gross profit margin for NATIONAL HEALTH INVESTORS is currently very high, coming in at 71.01%. It has increased significantly from the same period last year. Along with this, the net profit margin of 54.35% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $28.88 million or 21.09% when compared to the same quarter last year. Despite an increase in cash flow, NATIONAL HEALTH INVESTORS's average is still marginally south of the industry average growth rate of 29.95%.

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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