Don't Miss Out: Top 3 Yielding Buy-Rated Stocks: SIX, SO, WPZ

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."

Six Flags Entertainment

Dividend Yield: 4.80%

Six Flags Entertainment (NYSE: SIX) shares currently have a dividend yield of 4.80%.

Six Flags Entertainment Corporation owns and operates regional theme, water, and zoological parks. The company's parks offer various thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues, and retail outlets. The company has a P/E ratio of 28.57.

The average volume for Six Flags Entertainment has been 656,100 shares per day over the past 30 days. Six Flags Entertainment has a market cap of $3.7 billion and is part of the leisure industry. Shares are up 3.8% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Six Flags Entertainment as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, expanding profit margins, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • SIX's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 3.5%. 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 Hotels, Restaurants & Leisure industry. The net income increased by 40.0% when compared to the same quarter one year prior, rising from $47.36 million to $66.31 million.
  • The gross profit margin for SIX FLAGS ENTERTAINMENT CORP is rather high; currently it is at 58.07%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.60% is above that of the industry average.
  • 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.
  • SIX FLAGS ENTERTAINMENT CORP has improved earnings per share by 42.5% 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, SIX FLAGS ENTERTAINMENT CORP reported lower earnings of $1.20 versus $3.04 in the prior year. This year, the market expects an improvement in earnings ($1.51 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.

Southern

Dividend Yield: 4.70%

Southern (NYSE: SO) shares currently have a dividend yield of 4.70%.

The Southern Company, together with its subsidiaries, operates as a public electric utility company. The company has a P/E ratio of 17.61.

The average volume for Southern has been 4,392,500 shares per day over the past 30 days. Southern has a market cap of $39.5 billion and is part of the utilities industry. Shares are up 5.3% year-to-date as of the close of trading on Thursday.

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

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electric Utilities industry. The net income increased by 100.6% when compared to the same quarter one year prior, rising from $313.00 million to $628.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.7%. Since the same quarter one year prior, revenues slightly increased by 5.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SOUTHERN CO 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, SOUTHERN CO reported lower earnings of $1.87 versus $2.67 in the prior year. This year, the market expects an improvement in earnings ($2.78 versus $1.87).
  • 35.97% is the gross profit margin for SOUTHERN CO which we consider to be strong. Regardless of SO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SO's net profit margin of 14.05% compares favorably to the industry average.
  • In its most recent trading session, SO 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 toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.

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

Williams Partners

Dividend Yield: 7.00%

Williams Partners (NYSE: WPZ) shares currently have a dividend yield of 7.00%.

Williams Partners L.P., an energy infrastructure company, focuses on connecting North America's hydrocarbon resource plays to growing markets for natural gas and natural gas liquids (NGL). It operates in Northeast G&P, Atlantic-Gulf, West, and NGL & Petchem Services segments. The company has a P/E ratio of 39.39.

The average volume for Williams Partners has been 797,400 shares per day over the past 30 days. Williams Partners has a market cap of $22.6 billion and is part of the energy industry. Shares are down 0.4% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Williams Partners as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins 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:
  • 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 Oil, Gas & Consumable Fuels industry average. The net income increased by 2.3% when compared to the same quarter one year prior, going from $344.00 million to $352.00 million.
  • 39.93% is the gross profit margin for WILLIAMS PARTNERS LP which we consider to be strong. Regardless of WPZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WPZ's net profit margin of 20.79% significantly outperformed against the industry.
  • Net operating cash flow has slightly increased to $549.00 million or 7.43% when compared to the same quarter last year. Despite an increase in cash flow, WILLIAMS PARTNERS LP's average is still marginally south of the industry average growth rate of 16.72%.
  • WILLIAMS PARTNERS LP's earnings per share declined by 28.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, WILLIAMS PARTNERS LP reported lower earnings of $1.45 versus $1.94 in the prior year. This year, the market expects an improvement in earnings ($1.91 versus $1.45).
  • WPZ, with its decline in revenue, slightly underperformed the industry average of 3.5%. Since the same quarter one year prior, revenues slightly dropped by 6.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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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