What To Buy: Top 3 Buy-Rated Dividend Stocks: PTR, TCP, ORI

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."

PetroChina

Dividend Yield: 4.10%

PetroChina (NYSE: PTR) shares currently have a dividend yield of 4.10%.

PetroChina Company Limited produces and sells oil and gas in the People's Republic of China. The company operates in four segments: Exploration and Production, Refining and Chemicals, Marketing, and Natural Gas and Pipeline. The company has a P/E ratio of 187.21.

The average volume for PetroChina has been 142,700 shares per day over the past 30 days. PetroChina has a market cap of $215.9 billion and is part of the energy industry. Shares are up 5.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates PetroChina as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 9.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PETROCHINA CO LTD has improved earnings per share by 11.6% 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, PETROCHINA CO LTD increased its bottom line by earning $11.70 versus $10.11 in the prior year. This year, the market expects an improvement in earnings ($12.17 versus $11.70).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry average. The net income increased by 12.2% when compared to the same quarter one year prior, going from $4,876.76 million to $5,472.07 million.
  • Net operating cash flow has increased to $18,209.64 million or 31.22% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -2.53%.

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: 5.00%

TC Pipelines (NYSE: TCP) shares currently have a dividend yield of 5.00%.

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 26.13.

The average volume for TC Pipelines has been 187,400 shares per day over the past 30 days. TC Pipelines has a market cap of $4.3 billion and is part of the energy industry. Shares are up 40.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates TC Pipelines as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, expanding profit margins 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:
  • Compared to its closing price of one year ago, TCP's share price has jumped by 31.68%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TCP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for TC PIPELINES LP is currently very high, coming in at 76.25%. Regardless of TCP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TCP's net profit margin of 38.75% significantly outperformed against the industry.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.7%. Since the same quarter one year prior, revenues slightly dropped by 5.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • TC PIPELINES LP's earnings per share declined by 17.2% in the most recent quarter compared to 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, 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 ($2.59 versus $2.13).
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TC PIPELINES LP's return on equity is significantly below that of the industry average and is below that of 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.

Old Republic International Corporation

Dividend Yield: 4.80%

Old Republic International Corporation (NYSE: ORI) shares currently have a dividend yield of 4.80%.

Old Republic International Corporation, through its subsidiaries, is engaged in underwriting insurance products primarily in the United States and Canada. The company has a P/E ratio of 9.78.

The average volume for Old Republic International Corporation has been 1,498,200 shares per day over the past 30 days. Old Republic International Corporation has a market cap of $3.9 billion and is part of the insurance industry. Shares are down 13.6% year-to-date as of the close of trading on Tuesday.

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 Old Republic International Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels 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:
  • ORI's revenue growth trails the industry average of 24.3%. Since the same quarter one year prior, revenues slightly increased by 0.8%. 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.
  • Although ORI's debt-to-equity ratio of 0.25 is very low, it is currently higher than that of the industry average.
  • 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 Insurance industry and the overall market on the basis of return on equity, OLD REPUBLIC INTL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • OLD REPUBLIC INTL CORP's earnings per share declined by 16.7% in the most recent quarter compared to 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, OLD REPUBLIC INTL CORP turned its bottom line around by earning $1.57 versus -$0.27 in the prior year. For the next year, the market is expecting a contraction of 45.9% in earnings ($0.85 versus $1.57).

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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