3 Buy-Rated Dividend Stocks: NYCB, BCE, CBRL

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."

New York Community Bancorp

Dividend Yield: 6.40%

New York Community Bancorp (NYSE: NYCB) shares currently have a dividend yield of 6.40%.

New York Community Bancorp, Inc. operates as a multi-bank holding company for New York Community Bank and New York Commercial Bank that offer banking products and financial services in New York, New Jersey, Florida, Ohio, and Arizona. The company has a P/E ratio of 14.56.

The average volume for New York Community Bancorp has been 2,463,000 shares per day over the past 30 days. New York Community Bancorp has a market cap of $6.9 billion and is part of the banking industry. Shares are down 8.3% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates New York Community Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins and increase in stock price during the past year. 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 NEW YORK CMNTY BANCORP INC is currently very high, coming in at 71.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.22% is above that of the industry average.
  • Despite the weak revenue results, NYCB has significantly outperformed against the industry average of 35.6%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • In its most recent trading session, NYCB 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.
  • NEW YORK CMNTY BANCORP INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, NEW YORK CMNTY BANCORP INC reported lower earnings of $1.08 versus $1.14 in the prior year. For the next year, the market is expecting a contraction of 2.8% in earnings ($1.05 versus $1.08).
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Thrifts & Mortgage Finance industry average. The net income has decreased by 3.1% when compared to the same quarter one year ago, dropping from $122.52 million to $118.69 million.

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

BCE

Dividend Yield: 5.10%

BCE (NYSE: BCE) shares currently have a dividend yield of 5.10%.

BCE Inc., a communications company, provides broadband communication services to residential and business customers in Canada. The company operates through four segments: Bell Wireline, Bell Wireless, Bell Media, and Bell Aliant. The company has a P/E ratio of 19.05.

The average volume for BCE has been 613,500 shares per day over the past 30 days. BCE has a market cap of $34.8 billion and is part of the telecommunications industry. Shares are up 2.7% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates BCE as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, expanding profit margins, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • BCE's revenue growth has slightly outpaced the industry average of 2.6%. Since the same quarter one year prior, revenues slightly increased by 3.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • 48.38% is the gross profit margin for BCE INC which we consider to be strong. Regardless of BCE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BCE's net profit margin of 12.70% compares favorably to the industry average.
  • BCE INC has improved earnings per share by 8.2% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, BCE INC reported lower earnings of $2.54 versus $3.17 in the prior year.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Diversified Telecommunication Services industry average, but is greater than that of the S&P 500. The net income increased by 8.2% when compared to the same quarter one year prior, going from $599.00 million to $648.00 million.

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

Cracker Barrel Old Country Store

Dividend Yield: 4.10%

Cracker Barrel Old Country Store (NASDAQ: CBRL) shares currently have a dividend yield of 4.10%.

Cracker Barrel Old Country Store, Inc. develops and operates the Cracker Barrel Old Country Store concept in the United States. It operates full-service restaurants, which provide breakfast, lunch, and dinner. The company has a P/E ratio of 18.30.

The average volume for Cracker Barrel Old Country Store has been 172,500 shares per day over the past 30 days. Cracker Barrel Old Country Store has a market cap of $2.3 billion and is part of the leisure industry. Shares are down 11.7% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Cracker Barrel Old Country Store as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, reasonable valuation levels, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • CBRL's revenue growth has slightly outpaced the industry average of 5.9%. Since the same quarter one year prior, revenues slightly increased by 0.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CRACKER BARREL OLD CTRY STOR has improved earnings per share by 17.6% 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, CRACKER BARREL OLD CTRY STOR increased its bottom line by earning $4.89 versus $4.41 in the prior year. This year, the market expects an improvement in earnings ($5.58 versus $4.89).
  • 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 Hotels, Restaurants & Leisure industry average. The net income increased by 16.8% when compared to the same quarter one year prior, going from $24.60 million to $28.73 million.
  • 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 Hotels, Restaurants & Leisure industry and the overall market, CRACKER BARREL OLD CTRY STOR's return on equity significantly exceeds 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.

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