3 Buy-Rated Dividend Stocks To Check Out: SUNS, HRZN, CRT

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."

Solar Senior Capital

Dividend Yield: 9.00%

Solar Senior Capital (NASDAQ: SUNS) shares currently have a dividend yield of 9.00%.

Solar Senior Capital Ltd. is a business development company specializing in investments in leveraged, middle-market companies in the United States. The fund invests in the form of senior secured loans, including first lien, unitranche, and second lien debt instruments. The company has a P/E ratio of 12.91.

The average volume for Solar Senior Capital has been 88,200 shares per day over the past 30 days. Solar Senior Capital has a market cap of $181.6 million and is part of the financial services industry. Shares are down 13.6% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Solar Senior Capital as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, expanding profit margins and impressive record of earnings per share growth. 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 revenue growth came in higher than the industry average of 2.5%. Since the same quarter one year prior, revenues slightly increased by 8.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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 Capital Markets industry. The net income increased by 30.6% when compared to the same quarter one year prior, rising from $1.49 million to $1.94 million.
  • Net operating cash flow has significantly increased by 135.72% to $4.69 million when compared to the same quarter last year. In addition, SOLAR SENIOR CAPITAL LTD has also vastly surpassed the industry average cash flow growth rate of -89.07%.
  • The gross profit margin for SOLAR SENIOR CAPITAL LTD is currently very high, coming in at 75.09%. Regardless of SUNS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SUNS's net profit margin of 37.78% significantly outperformed against the industry.
  • SOLAR SENIOR CAPITAL LTD has improved earnings per share by 30.8% 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, SOLAR SENIOR CAPITAL LTD reported lower earnings of $1.11 versus $1.46 in the prior year. This year, the market expects an improvement in earnings ($1.17 versus $1.11).

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

Horizon Technology Finance

Dividend Yield: 9.80%

Horizon Technology Finance (NASDAQ: HRZN) shares currently have a dividend yield of 9.80%.

Horizon Technology Finance Corporation, a specialty finance company, lends to and invests in development-stage companies in the United States. The company has a P/E ratio of 19.54.

The average volume for Horizon Technology Finance has been 71,600 shares per day over the past 30 days. Horizon Technology Finance has a market cap of $135.4 million and is part of the financial services industry. Shares are down 1.8% 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 Horizon Technology Finance as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins, good cash flow from operations, impressive record of earnings per share growth and notable return on equity. 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:
  • 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 112.1% when compared to the same quarter one year prior, rising from $1.15 million to $2.44 million.
  • The gross profit margin for HORIZON TECHNOLOGY FINANCE is rather high; currently it is at 64.35%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.99% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 96.68% to $7.42 million when compared to the same quarter last year. In addition, HORIZON TECHNOLOGY FINANCE has also vastly surpassed the industry average cash flow growth rate of -89.07%.
  • HORIZON TECHNOLOGY FINANCE 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, HORIZON TECHNOLOGY FINANCE reported lower earnings of $0.37 versus $0.56 in the prior year. This year, the market expects an improvement in earnings ($1.13 versus $0.37).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 2.5%. Since the same quarter one year prior, revenues slightly dropped by 1.0%. The declining revenue has not hurt the company's bottom line, with increasing 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.

Cross Timbers Royalty

Dividend Yield: 9.70%

Cross Timbers Royalty (NYSE: CRT) shares currently have a dividend yield of 9.70%.

Cross Timbers Royalty Trust operates as an express trust in the United States. The company's function is to collect and distribute monthly net profits income from royalty interests and overriding royalty interests to unit holders. The company has a P/E ratio of 11.77.

The average volume for Cross Timbers Royalty has been 19,800 shares per day over the past 30 days. Cross Timbers Royalty has a market cap of $189.9 million and is part of the energy industry. Shares are up 9% 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 Cross Timbers Royalty as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, compelling growth in net income and expanding profit margins. 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:
  • The revenue growth came in higher than the industry average of 3.1%. Since the same quarter one year prior, revenues rose by 19.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CRT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 12.31, which clearly demonstrates the ability to cover 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 Oil, Gas & Consumable Fuels industry and the overall market, CROSS TIMBERS ROYALTY TRUST's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 21.6% when compared to the same quarter one year prior, going from $3.10 million to $3.77 million.
  • The gross profit margin for CROSS TIMBERS ROYALTY TRUST is currently very high, coming in at 100.00%. CRT has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, CRT's net profit margin of 97.56% significantly outperformed against the industry.

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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