What To Buy: Top 3 Buy-Rated Dividend Stocks: HR, RHP, PEG

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."

Healthcare Realty

Dividend Yield: 4.90%

Healthcare Realty (NYSE: HR) shares currently have a dividend yield of 4.90%.

Healthcare Realty Trust Incorporated is an independent real estate investment trust. The firm invests in real estate markets of the United States. The company has a P/E ratio of 70.40.

The average volume for Healthcare Realty has been 544,600 shares per day over the past 30 days. Healthcare Realty has a market cap of $2.4 billion and is part of the real estate industry. Shares are up 14.9% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Healthcare Realty as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, reasonable valuation levels, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • HR's revenue growth has slightly outpaced the industry average of 9.5%. Since the same quarter one year prior, revenues rose by 15.8%. 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 124.7% when compared to the same quarter one year prior, rising from -$24.21 million to $5.97 million.
  • Net operating cash flow has slightly increased to $42.92 million or 6.17% when compared to the same quarter last year. In addition, HEALTHCARE REALTY TRUST INC has also vastly surpassed the industry average cash flow growth rate of -58.18%.
  • HEALTHCARE REALTY TRUST 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, HEALTHCARE REALTY TRUST INC swung to a loss, reporting -$0.15 versus $0.01 in the prior year. This year, the market expects an improvement in earnings ($0.34 versus -$0.15).

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

Ryman Hospitality Properties

Dividend Yield: 4.60%

Ryman Hospitality Properties (NYSE: RHP) shares currently have a dividend yield of 4.60%.

Ryman Hospitality Properties, Inc. owns and operates hotels in the United States. The company has a P/E ratio of 35.95.

The average volume for Ryman Hospitality Properties has been 485,700 shares per day over the past 30 days. Ryman Hospitality Properties has a market cap of $2.4 billion and is part of the real estate industry. Shares are up 16% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Ryman Hospitality Properties as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, 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:
  • RHP's revenue growth has slightly outpaced the industry average of 9.5%. Since the same quarter one year prior, revenues rose by 10.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, RHP's share price has jumped by 28.18%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • Net operating cash flow has significantly increased by 163.65% to $29.83 million when compared to the same quarter last year. In addition, RYMAN HOSPITALITY PPTYS INC has also vastly surpassed the industry average cash flow growth rate of -58.18%.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, RYMAN HOSPITALITY PPTYS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • RYMAN HOSPITALITY PPTYS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, RYMAN HOSPITALITY PPTYS INC turned its bottom line around by earning $1.77 versus -$0.60 in the prior year. For the next year, the market is expecting a contraction of 10.4% in earnings ($1.59 versus $1.77).

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

Public Service Enterprise Group

Dividend Yield: 4.20%

Public Service Enterprise Group (NYSE: PEG) shares currently have a dividend yield of 4.20%.

Public Service Enterprise Group Incorporated, through its subsidiaries, operates as an energy company primarily in the Northeastern and Mid Atlantic United States. The company has a P/E ratio of 15.17.

The average volume for Public Service Enterprise Group has been 3,431,700 shares per day over the past 30 days. Public Service Enterprise Group has a market cap of $18.0 billion and is part of the utilities industry. Shares are up 10.2% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Public Service Enterprise Group as a buy. The company's strongest point has been its strong cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite the weak revenue results, PEG has outperformed against the industry average of 14.7%. Since the same quarter one year prior, revenues slightly dropped by 2.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • PUBLIC SERVICE ENTRP GRP INC's earnings per share declined by 36.4% 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 year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, PUBLIC SERVICE ENTRP GRP INC reported lower earnings of $2.45 versus $2.51 in the prior year. This year, the market expects an improvement in earnings ($2.72 versus $2.45).
  • In its most recent trading session, PEG 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.
  • Net operating cash flow has decreased to $332.00 million or 28.75% when compared to the same quarter last year. Despite a decrease in cash flow PUBLIC SERVICE ENTRP GRP INC is still fairing well by exceeding its industry average cash flow growth rate of -60.82%.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Multi-Utilities industry. The net income has significantly decreased by 36.3% when compared to the same quarter one year ago, falling from $333.00 million to $212.00 million.

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

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Oil Slumps, Gas Spikes Ahead of Holiday Weekend; Assessing the Chipmakers--ICYMI

Oil Slumps, Gas Spikes Ahead of Holiday Weekend; Assessing the Chipmakers--ICYMI

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain

Dow and S&P 500 Decline, Energy Shares Fall as U.S. Crude Oil Slides 4%

Dow and S&P 500 Decline, Energy Shares Fall as U.S. Crude Oil Slides 4%