Best Of The Buy-Rated Dividend Stocks: Top 3 Companies: MBT, MWE, TCP

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."

Mobile Telesystems OJSC

Dividend Yield: 4.90%

Mobile Telesystems OJSC (NYSE: MBT) shares currently have a dividend yield of 4.90%.

Mobile TeleSystems OJSC provides a range of mobile and fixed line voice and data telecommunications services in Russia and the CIS. It offers data transfer, broadband, pay-TV, and various value-added services, as well as sells equipment and accessories. The company has a P/E ratio of 18.09.

The average volume for Mobile Telesystems OJSC has been 1,964,300 shares per day over the past 30 days. Mobile Telesystems OJSC has a market cap of $18.3 billion and is part of the telecommunications industry. Shares are down 14.7% year-to-date as of the close of trading on Friday.

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

TheStreet Ratings rates Mobile Telesystems OJSC as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, largely solid financial position with reasonable debt levels by most measures 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:
  • The revenue growth significantly trails the industry average of 54.8%. Since the same quarter one year prior, revenues slightly increased by 9.9%. 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.
  • MOBILE TELESYSTEMS OJSC's earnings per share declined by 13.3% 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, MOBILE TELESYSTEMS OJSC increased its bottom line by earning $2.34 versus $1.04 in the prior year. This year, the market expects an improvement in earnings ($67.04 versus $2.34).
  • Despite the current debt-to-equity ratio of 1.56, it is still below the industry average, suggesting that this level of debt is acceptable within the Wireless Telecommunication Services industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.94 is weak.
  • The gross profit margin for MOBILE TELESYSTEMS OJSC is currently very high, coming in at 72.52%. Regardless of MBT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MBT's net profit margin of 20.94% is significantly lower than the industry average.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Wireless Telecommunication Services industry and the overall market, MOBILE TELESYSTEMS OJSC'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.

MarkWest Energy Partners

Dividend Yield: 4.40%

MarkWest Energy Partners (NYSE: MWE) shares currently have a dividend yield of 4.40%.

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 average volume for MarkWest Energy Partners has been 961,100 shares per day over the past 30 days. MarkWest Energy Partners has a market cap of $14.1 billion and is part of the energy industry. Shares are up 20.6% year-to-date as of the close of trading on Friday.

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

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, good cash flow from operations, increase in stock price during the past year, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. 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 revenue growth came in higher than the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 24.9%. 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.
  • Net operating cash flow has significantly increased by 164.11% to $244.45 million when compared to the same quarter last year. In addition, MARKWEST ENERGY PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -5.36%.
  • 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. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • 39.55% is the gross profit margin for MARKWEST ENERGY PARTNERS LP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.73% trails the industry average.
  • MARKWEST ENERGY PARTNERS LP 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. 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, 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 ($0.76 versus $0.21).

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

TC Pipelines

Dividend Yield: 5.70%

TC Pipelines (NYSE: TCP) shares currently have a dividend yield of 5.70%.

TC PipeLines, LP acquires, owns, and participates in the management of energy infrastructure businesses in North America. The company has a P/E ratio of 21.79.

The average volume for TC Pipelines has been 211,700 shares per day over the past 30 days. TC Pipelines has a market cap of $3.7 billion and is part of the energy industry. Shares are up 21% year-to-date as of the close of trading on Friday.

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

TheStreet Ratings rates TC Pipelines as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, expanding profit margins, good cash flow from operations, growth in earnings per share and increase in net income. 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:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • The gross profit margin for TC PIPELINES LP is currently very high, coming in at 78.05%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 45.12% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 266.66% to $88.00 million when compared to the same quarter last year. In addition, TC PIPELINES LP has also vastly surpassed the industry average cash flow growth rate of -5.36%.
  • Despite the stagnant revenue growth, the company outperformed against the industry average of 3.5%. Since the same quarter one year prior, revenues have remained constant. The stagnant revenue growth has not kept the company from increasing earnings per share.
  • TC PIPELINES LP has improved earnings per share by 45.0% 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, TC PIPELINES LP reported lower earnings of $2.13 versus $3.27 in the prior year. This year, the market expects an improvement in earnings ($2.71 versus $2.13).

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

Nvidia Is 1 of 30 Well-Known Stocks That Look Ready to Abruptly Change Direction

Nvidia Is 1 of 30 Well-Known Stocks That Look Ready to Abruptly Change Direction

Here Is Why These 5 Emerging-Market Picks Are Poised for Growth

Here Is Why These 5 Emerging-Market Picks Are Poised for Growth

Analysts' Actions -- General Mills, MasterCard, Visa, Valeant and More

Analysts' Actions -- General Mills, MasterCard, Visa, Valeant and More

Finding the Bullish and Bearish Reversals

Finding the Bullish and Bearish Reversals

Mobile TeleSystems (MBT) Stock Slumps After Q2 Results

Mobile TeleSystems (MBT) Stock Slumps After Q2 Results