Top 3 Yielding Buy-Rated Stocks: MAIN, MWE, WPC

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."

Main Street Capital Corporation

Dividend Yield: 6.20%

Main Street Capital Corporation (NYSE: MAIN) shares currently have a dividend yield of 6.20%.

Main Street Capital Corporation is a business development company specializing in long- term equity, equity related, and debt investments in small and lower middle market companies. The company has a P/E ratio of 15.01.

The average volume for Main Street Capital Corporation has been 389,800 shares per day over the past 30 days. Main Street Capital Corporation has a market cap of $1.4 billion and is part of the financial services industry. Shares are down 2.4% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Main Street Capital Corporation as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, good cash flow from operations, 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 weak growth in earnings per share.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 20.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The gross profit margin for MAIN STREET CAPITAL CORP is currently very high, coming in at 84.56%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 88.49% significantly outperformed against the industry average.
  • Net operating cash flow has increased to -$16.73 million or 31.13% when compared to the same quarter last year. In addition, MAIN STREET CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of -97.00%.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Capital Markets industry average. The net income increased by 15.3% when compared to the same quarter one year prior, going from $23.63 million to $27.23 million.
  • In its most recent trading session, MAIN 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.

MarkWest Energy Partners

Dividend Yield: 4.90%

MarkWest Energy Partners (NYSE: MWE) shares currently have a dividend yield of 4.90%.

MarkWest Energy Partners, L.P. is engaged in the gathering, processing, and transportation of natural gas. The company is also engaged in the gathering, transportation, fractionation, storage, and marketing of natural gas liquids; and the gathering and transportation of crude oil. The company has a P/E ratio of 166.30.

The average volume for MarkWest Energy Partners has been 953,200 shares per day over the past 30 days. MarkWest Energy Partners has a market cap of $11.6 billion and is part of the energy industry. Shares are up 8.9% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates MarkWest Energy Partners as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, growth in earnings per share and expanding profit margins. 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 greatly exceeded the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 37.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 180.8% when compared to the same quarter one year prior, rising from -$15.46 million to $12.49 million.
  • Net operating cash flow has increased to $112.37 million or 32.13% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 16.72%.
  • MARKWEST ENERGY PARTNERS LP 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, MARKWEST ENERGY PARTNERS LP reported lower earnings of $0.21 versus $1.70 in the prior year. This year, the market expects an improvement in earnings ($0.75 versus $0.21).
  • 43.96% is the gross profit margin for MARKWEST ENERGY PARTNERS LP which we consider to be strong. Regardless of MWE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.43% trails the industry average.

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

W P Carey

Dividend Yield: 5.40%

W P Carey (NYSE: WPC) shares currently have a dividend yield of 5.40%.

W. P. Carey Inc. is an independent equity real estate investment trust. The firm also provides long-term sale-leaseback and build-to-suit financing for companies. It invests in the real estate markets across the globe. The company has a P/E ratio of 30.92.

The average volume for W P Carey has been 449,000 shares per day over the past 30 days. W P Carey has a market cap of $6.6 billion and is part of the real estate industry. Shares are up 8.5% year-to-date as of the close of trading on Monday.

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

Highlights from the ratings report include:
  • WPC's very impressive revenue growth greatly exceeded the industry average of 10.1%. Since the same quarter one year prior, revenues leaped by 97.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 696.1% when compared to the same quarter one year prior, rising from $14.18 million to $112.89 million.
  • Net operating cash flow has significantly increased by 150.04% to $43.70 million when compared to the same quarter last year. In addition, W P CAREY INC has also vastly surpassed the industry average cash flow growth rate of -37.20%.
  • The gross profit margin for W P CAREY INC is currently very high, coming in at 74.09%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, WPC's net profit margin of 53.97% significantly outperformed against the industry.
  • W P CAREY INC 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, W P CAREY INC reported lower earnings of $1.20 versus $2.03 in the prior year. This year, the market expects an improvement in earnings ($2.14 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.

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