3 Buy-Rated Dividend Stocks Taking The Lead: LHO, BBEP, HPT

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."

LaSalle Hotel Properties

Dividend Yield: 4.30%

LaSalle Hotel Properties (NYSE: LHO) shares currently have a dividend yield of 4.30%.

LaSalle Hotel Properties, a real estate investment trust (REIT), engages in the purchase, ownership, redevelopment, and leasing of primarily upscale and luxury full-service hotels in convention, resort, and urban business markets in the United States. The company has a P/E ratio of 29.52.

The average volume for LaSalle Hotel Properties has been 900,000 shares per day over the past 30 days. LaSalle Hotel Properties has a market cap of $3.6 billion and is part of the real estate industry. Shares are up 14% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates LaSalle Hotel Properties as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • LHO's revenue growth has slightly outpaced the industry average of 11.6%. Since the same quarter one year prior, revenues rose by 17.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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.
  • LASALLE HOTEL PROPERTIES 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, LASALLE HOTEL PROPERTIES increased its bottom line by earning $0.73 versus $0.52 in the prior year. This year, the market expects an improvement in earnings ($1.36 versus $0.73).
  • 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 121.9% when compared to the same quarter one year prior, rising from $40.86 million to $90.69 million.

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

BreitBurn Energy Partners

Dividend Yield: 9.80%

BreitBurn Energy Partners (NASDAQ: BBEP) shares currently have a dividend yield of 9.80%.

BreitBurn Energy Partners L.P., an independent oil and gas company, acquires, explores, and develops oil, natural gas liquids (NGLs), and gas properties in the United States.

The average volume for BreitBurn Energy Partners has been 671,900 shares per day over the past 30 days. BreitBurn Energy Partners has a market cap of $2.5 billion and is part of the energy industry. Shares are up 0.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates BreitBurn Energy Partners as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations 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:
  • Net operating cash flow has significantly increased by 93.92% to $74.80 million when compared to the same quarter last year. In addition, BREITBURN ENERGY PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -5.18%.
  • 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.
  • BBEP, with its very weak revenue results, has greatly underperformed against the industry average of 3.0%. Since the same quarter one year prior, revenues plummeted by 57.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • BREITBURN 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. 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, BREITBURN ENERGY PARTNERS LP continued to lose money by earning -$0.40 versus -$0.60 in the prior year. For the next year, the market is expecting a contraction of 59.0% in earnings (-$0.64 versus -$0.40).
  • BBEP's debt-to-equity ratio of 0.92 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that BBEP's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.50 is low and demonstrates weak liquidity.

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

Hospitality Properties

Dividend Yield: 6.70%

Hospitality Properties (NYSE: HPT) shares currently have a dividend yield of 6.70%.

Hospitality Properties Trust, a real estate investment trust (REIT), engages in buying, owning, and leasing hotels. The company has a P/E ratio of 31.86.

The average volume for Hospitality Properties has been 656,100 shares per day over the past 30 days. Hospitality Properties has a market cap of $4.0 billion and is part of the real estate industry. Shares are up 0.6% 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 Hospitality Properties as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, reasonable valuation levels, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • 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 Real Estate Investment Trusts (REITs) industry average. The net income increased by 18.9% when compared to the same quarter one year prior, going from $45.35 million to $53.92 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.6%. Since the same quarter one year prior, revenues slightly increased by 9.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has slightly increased to $138.03 million or 8.94% when compared to the same quarter last year. Despite an increase in cash flow, HOSPITALITY PROPERTIES TRUST's cash flow growth rate is still lower than the industry average growth rate of 19.03%.
  • HOSPITALITY PROPERTIES TRUST has improved earnings per share by 22.2% 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, HOSPITALITY PROPERTIES TRUST reported lower earnings of $0.73 versus $0.84 in the prior year. This year, the market expects an improvement in earnings ($1.06 versus $0.73).

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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