Top 3 Yielding Buy-Rated Stocks: AI, FULL, NMM

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."

Arlington Asset Investment

Dividend Yield: 13.20%

Arlington Asset Investment (NYSE: AI) shares currently have a dividend yield of 13.20%.

Arlington Asset Investment Corp., an investment firm, acquires mortgage-related and other assets. The company has a P/E ratio of 8.18.

The average volume for Arlington Asset Investment has been 220,200 shares per day over the past 30 days. Arlington Asset Investment has a market cap of $509.2 million and is part of the real estate industry. Shares are up 0.3% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Arlington Asset Investment as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, increase in net income, growth in earnings per share 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:
  • AI's very impressive revenue growth greatly exceeded the industry average of 0.5%. Since the same quarter one year prior, revenues leaped by 274.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for ARLINGTON ASSET INVESTMENT is currently very high, coming in at 76.86%. It has increased significantly from the same period last year. Along with this, the net profit margin of 39.16% significantly outperformed against the industry average.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 121.4% when compared to the same quarter one year prior, rising from $3.18 million to $7.03 million.
  • ARLINGTON ASSET INVESTMENT reported significant earnings per share improvement 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, ARLINGTON ASSET INVESTMENT reported lower earnings of $2.96 versus $15.11 in the prior year. This year, the market expects an improvement in earnings ($4.16 versus $2.96).
  • In its most recent trading session, AI 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.

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

Full Circle Capital

Dividend Yield: 10.30%

Full Circle Capital (NASDAQ: FULL) shares currently have a dividend yield of 10.30%.

Full Circle Capital Corporation is a business development company specializing in debt and equity securities of smaller and lower middle-market companies. The company has a P/E ratio of 31.12.

The average volume for Full Circle Capital has been 128,800 shares per day over the past 30 days. Full Circle Capital has a market cap of $78.5 million and is part of the financial services industry. Shares are up 10.9% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Full Circle Capital as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • FULL's very impressive revenue growth greatly exceeded the industry average of 0.5%. Since the same quarter one year prior, revenues leaped by 71.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FULL CIRCLE CAPITAL CORP 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, FULL CIRCLE CAPITAL CORP increased its bottom line by earning $0.52 versus $0.44 in the prior year. This year, the market expects an improvement in earnings ($0.72 versus $0.52).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 128.3% when compared to the same quarter one year prior, rising from $1.48 million to $3.38 million.
  • The gross profit margin for FULL CIRCLE CAPITAL CORP is currently very high, coming in at 77.69%. It has increased significantly from the same period last year. Along with this, the net profit margin of 65.43% significantly outperformed against the industry average.
  • Net operating cash flow has increased to -$3.54 million or 15.92% when compared to the same quarter last year. In addition, FULL CIRCLE CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of -97.00%.

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

Navios Maritime Partners L.P

Dividend Yield: 9.10%

Navios Maritime Partners L.P (NYSE: NMM) shares currently have a dividend yield of 9.10%.

Navios Maritime Partners L.P. is engaged in the ownership and operation of dry cargo vessels in Europe, Asia, North America, and Australia. The company has a P/E ratio of 23.26.

The average volume for Navios Maritime Partners L.P has been 215,900 shares per day over the past 30 days. Navios Maritime Partners L.P has a market cap of $1.5 billion and is part of the transportation industry. Shares are up 2.5% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Navios Maritime Partners L.P as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.8%. Since the same quarter one year prior, revenues rose by 12.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Marine industry average. The net income increased by 13.0% when compared to the same quarter one year prior, going from $16.25 million to $18.36 million.
  • Net operating cash flow has increased to $36.28 million or 23.44% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 12.56%.
  • The gross profit margin for NAVIOS MARITIME PARTNERS LP is currently very high, coming in at 92.11%. Regardless of NMM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NMM's net profit margin of 32.59% significantly outperformed against the industry.
  • NMM's debt-to-equity ratio of 0.67 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 9.04 is very high and demonstrates very strong liquidity.

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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