Buy These Top 3 Buy-Rated Dividend Stocks Today: SIR, BX, T

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."

Select Income REIT

Dividend Yield: 6.90%

Select Income REIT (NYSE: SIR) shares currently have a dividend yield of 6.90%.

Select Income REIT is a real estate investment trust managed by Reit Management & Research LLC. The firm invests in the real estate markets of United States with a focus on Hawaii. The fund seeks to invest in office and industrial properties. Select Income REIT is domiciled in United States. The company has a P/E ratio of 14.02.

The average volume for Select Income REIT has been 582,400 shares per day over the past 30 days. Select Income REIT has a market cap of $1.7 billion and is part of the real estate industry. Shares are up 5% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Select Income REIT 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, compelling growth 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 disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 10.5%. Since the same quarter one year prior, revenues rose by 23.1%. 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.
  • The gross profit margin for SELECT INCOME REIT is rather high; currently it is at 65.32%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 53.30% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $42.66 million or 35.76% when compared to the same quarter last year. In addition, SELECT INCOME REIT has also vastly surpassed the industry average cash flow growth rate of -42.37%.
  • 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 32.6% when compared to the same quarter one year prior, rising from $22.79 million to $30.21 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.

Blackstone Group

Dividend Yield: 6.70%

Blackstone Group (NYSE: BX) shares currently have a dividend yield of 6.70%.

The Blackstone Group L.P. is a publicly owned investment manager. The firm also provides financial advisory services to its clients. It provides its services to public and corporate pension funds, academic, cultural, and charitable organizations. The company has a P/E ratio of 12.59.

The average volume for Blackstone Group has been 4,569,600 shares per day over the past 30 days. Blackstone Group has a market cap of $16.9 billion and is part of the financial services industry. Shares are up 7% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Blackstone Group as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • BX's very impressive revenue growth greatly exceeded the industry average of 2.6%. Since the same quarter one year prior, revenues leaped by 56.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for BLACKSTONE GROUP LP is rather high; currently it is at 53.06%. It has increased significantly from the same period last year. Along with this, the net profit margin of 22.89% is above that of the industry average.
  • Powered by its strong earnings growth of 136.11% and other important driving factors, this stock has surged by 43.36% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, BX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • BLACKSTONE GROUP LP 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, BLACKSTONE GROUP LP increased its bottom line by earning $1.98 versus $0.40 in the prior year. This year, the market expects an improvement in earnings ($3.84 versus $1.98).
  • 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 144.8% when compared to the same quarter one year prior, rising from $211.15 million to $517.02 million.

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

AT&T

Dividend Yield: 5.30%

AT&T (NYSE: T) shares currently have a dividend yield of 5.30%.

AT&T Inc. provides telecommunications services to consumers and businesses in the United States and internationally. The company has a P/E ratio of 10.17.

The average volume for AT&T has been 22,972,500 shares per day over the past 30 days. AT&T has a market cap of $178.8 billion and is part of the telecommunications industry. Shares are down 2% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates AT&T as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. 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 its growing revenue, the company underperformed as compared with the industry average of 1.8%. Since the same quarter one year prior, revenues slightly increased by 1.6%. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.91, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that T's debt-to-equity ratio is low, the quick ratio, which is currently 0.56, displays a potential problem in covering short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Diversified Telecommunication Services industry and the overall market on the basis of return on equity, AT&T INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The gross profit margin for AT&T INC is rather high; currently it is at 56.37%. Regardless of T's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, T's net profit margin of 10.88% compares favorably to 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.

Other helpful dividend tools from TheStreet:
null

If you liked this article you might like

Most Investors Should Own a Lot More REITs

Most Investors Should Own a Lot More REITs

3 Hold-Rated Dividend Stocks: CYS, SIR, NOK

3 Hold-Rated Dividend Stocks: CYS, SIR, NOK

What To Hold: 3 Hold-Rated Dividend Stocks MBT, SIR, LHO

What To Hold: 3 Hold-Rated Dividend Stocks MBT, SIR, LHO

What To Hold: 3 Hold-Rated Dividend Stocks SEAS, SIR, GSK

What To Hold: 3 Hold-Rated Dividend Stocks SEAS, SIR, GSK

3 Hold-Rated Dividend Stocks: SIR, RRMS, MSB

3 Hold-Rated Dividend Stocks: SIR, RRMS, MSB