3 Buy-Rated Dividend Stocks: BKCC, LOAN, CFFN

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."

BlackRock Kelso Capital Corporation

Dividend Yield: 9.30%

BlackRock Kelso Capital Corporation (NASDAQ: BKCC) shares currently have a dividend yield of 9.30%.

BlackRock Kelso Capital Corporation is a private equity firm specializing in investments in middle market companies. The firm invests in all industries. The company has a P/E ratio of 8.30.

The average volume for BlackRock Kelso Capital Corporation has been 970,800 shares per day over the past 30 days. BlackRock Kelso Capital Corporation has a market cap of $675.7 million and is part of the financial services industry. Shares are down 3.3% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates BlackRock Kelso Capital Corporation as a buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations 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:
  • The gross profit margin for BLACKROCK KELSO CAPITAL CORP is rather high; currently it is at 59.66%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 77.50% significantly outperformed against the industry average.
  • Net operating cash flow has slightly increased to $52.83 million or 6.49% when compared to the same quarter last year. Despite an increase in cash flow, BLACKROCK KELSO CAPITAL CORP's average is still marginally south of the industry average growth rate of 15.20%.
  • 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 on the basis of return on equity, BLACKROCK KELSO CAPITAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.1%. Since the same quarter one year prior, revenues slightly dropped by 5.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • BLACKROCK KELSO CAPITAL CORP's earnings per share declined by 25.6% 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, BLACKROCK KELSO CAPITAL CORP increased its bottom line by earning $1.20 versus $0.78 in the prior year. For the next year, the market is expecting a contraction of 31.1% in earnings ($0.83 versus $1.20).

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

Manhattan Bridge Capital

Dividend Yield: 7.50%

Manhattan Bridge Capital (NASDAQ: LOAN) shares currently have a dividend yield of 7.50%.

Manhattan Bridge Capital, Inc. provides short-term, secured, and non banking loans to real estate investors to fund their acquisition and construction of properties in the New York Metropolitan area. The company has a P/E ratio of 24.80.

The average volume for Manhattan Bridge Capital has been 17,300 shares per day over the past 30 days. Manhattan Bridge Capital has a market cap of $16.0 million and is part of the financial services industry. Shares are up 106.4% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Manhattan Bridge Capital as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 14.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 125.46% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LOAN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • MANHATTAN BRIDGE CAPITAL INC has improved earnings per share by 25.0% 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. During the past fiscal year, MANHATTAN BRIDGE CAPITAL INC increased its bottom line by earning $0.15 versus $0.10 in the prior year.
  • 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 Diversified Financial Services industry average. The net income increased by 20.2% when compared to the same quarter one year prior, going from $0.17 million to $0.21 million.

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

Capitol Federal Financial

Dividend Yield: 8.40%

Capitol Federal Financial (NASDAQ: CFFN) shares currently have a dividend yield of 8.40%.

Capitol Federal Financial, Inc. operates as the holding company for Capitol Federal Savings Bank that provides various banking products and services in the United States. The company has a P/E ratio of 23.88.

The average volume for Capitol Federal Financial has been 670,700 shares per day over the past 30 days. Capitol Federal Financial has a market cap of $1.7 billion and is part of the banking industry. Shares are down 1% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Capitol Federal Financial as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, expanding profit margins, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • CAPITOL FEDERAL FINL INC has improved earnings per share by 16.7% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, CAPITOL FEDERAL FINL INC increased its bottom line by earning $0.48 versus $0.47 in the prior year. This year, the market expects an improvement in earnings ($0.54 versus $0.48).
  • The gross profit margin for CAPITOL FEDERAL FINL INC is rather high; currently it is at 66.11%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.37% is above that of the industry average.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Thrifts & Mortgage Finance industry average. The net income increased by 11.1% when compared to the same quarter one year prior, going from $17.72 million to $19.69 million.
  • CFFN, with its decline in revenue, slightly underperformed the industry average of 0.1%. Since the same quarter one year prior, revenues slightly dropped by 4.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 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 Thrifts & Mortgage Finance industry and the overall market, CAPITOL FEDERAL FINL INC'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.

Other helpful dividend tools from TheStreet:

null

More from Markets

REPLAY: Jim Cramer on How to Navigate the Stock Market Amid Tariff Worries

REPLAY: Jim Cramer on How to Navigate the Stock Market Amid Tariff Worries

Global Markets Hit Hard; AMC Entertainment Sells Stake in Ad Unit -- ICYMI

Global Markets Hit Hard; AMC Entertainment Sells Stake in Ad Unit -- ICYMI

CVS, Walgreens and Citigroup: Cramer's 'Off the Charts'

CVS, Walgreens and Citigroup: Cramer's 'Off the Charts'

Jim Cramer: 4 Stocks Could Get Throttled By a 'Knock Down Drag Out' With China

Jim Cramer: 4 Stocks Could Get Throttled By a 'Knock Down Drag Out' With China

General Electric Booted From Dow, Replaced by Walgreens

General Electric Booted From Dow, Replaced by Walgreens