NEW YORK (TheStreet) -- Investors love dividend stocks.

And why shouldn't they? There's the income generation, always a plus. Besides, stocks with long dividend histories historically have outperformed the market.

Using TheStreet Ratings, TheStreet's proprietary stock rating tool, we found the best-rated stocks with the highest dividend yields.

TheStreet Ratings projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

The four stocks on the list all have a "buy" rating, with an A+ grade from TheStreet Ratings. Click through to see these best of the best stocks.

LTC Chart LTC data by YCharts

4. LTC Properties Inc. (LTC - Get Report)
Rating: Buy, A+

YTD Return: 3.6%
Annual Dividend Yield: 4.25%

LTC Properties, Inc. operates as a health care real estate investment trust (REIT) in the United States.

TheStreet Ratings team rates LTC PROPERTIES INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate LTC PROPERTIES INC (LTC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had subpar growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 0.6%. Since the same quarter one year prior, revenues rose by 14.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 25.89% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LTC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • LTC PROPERTIES INC has improved earnings per share by 17.9% 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, LTC PROPERTIES INC increased its bottom line by earning $1.56 versus $1.54 in the prior year. This year, the market expects an improvement in earnings ($1.93 versus $1.56).
  • The gross profit margin for LTC PROPERTIES INC is rather high; currently it is at 68.69%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 57.96% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $24.05 million or 12.21% when compared to the same quarter last year. In addition, LTC PROPERTIES INC has also vastly surpassed the industry average cash flow growth rate of -55.11%.

 

 

PACW Chart PACW data by YCharts

3. Pacwest Bancorp (PACW - Get Report)
Rating: Buy, A+

YTD Return: 3.5%
Annual Dividend Yield: 4.63%

PacWest Bancorp operates as the holding company for Pacific Western Bank that provides commercial banking products and services to individuals, professionals, and small to mid-sized businesses in the United States. It accepts demand, money market, and time deposits.

TheStreet Ratings team rates PACWEST BANCORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate PACWEST BANCORP (PACW) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • PACW's very impressive revenue growth greatly exceeded the industry average of 4.9%. Since the same quarter one year prior, revenues leaped by 178.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PACWEST BANCORP 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, PACWEST BANCORP increased its bottom line by earning $1.97 versus $1.08 in the prior year. This year, the market expects an improvement in earnings ($2.88 versus $1.97).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 2183.7% when compared to the same quarter one year prior, rising from $3.11 million to $71.00 million.
  • 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. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • The gross profit margin for PACWEST BANCORP is currently very high, coming in at 92.46%. Regardless of PACW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PACW's net profit margin of 31.92% compares favorably to the industry average.

 

BX Chart BX data by YCharts

2. Blackstone Group (BX - Get Report)
Rating: Buy, A+

YTD Return: 1.9%
Annual Dividend Yield: 5.29%

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.

TheStreet Ratings team rates BLACKSTONE GROUP LP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate BLACKSTONE GROUP LP (BX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had subpar growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for BLACKSTONE GROUP LP is rather high; currently it is at 61.02%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.28% is above that of the industry average.
  • 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.
  • BLACKSTONE GROUP LP's earnings per share declined by 14.4% 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, BLACKSTONE GROUP LP increased its bottom line by earning $2.59 versus $1.98 in the prior year. This year, the market expects an improvement in earnings ($3.76 versus $2.59).
  • BX, with its decline in revenue, underperformed when compared the industry average of 13.4%. Since the same quarter one year prior, revenues fell by 25.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has decreased by 11.2% when compared to the same quarter one year ago, dropping from $621.26 million to $551.45 million.

 

 

HPT Chart HPT data by YCharts

1. Hospitality Properties Trust (HPT - Get Report)
Rating: Buy, A+

YTD Return: 3.5%
Annual Dividend Yield: 5.78%

Hospitality Properties Trust, a real estate investment trust (REIT), engages in buying, owning, and leasing hotels.

TheStreet Ratings team rates HOSPITALITY PROPERTIES TRUST as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate HOSPITALITY PROPERTIES TRUST (HPT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, reasonable valuation levels, good cash flow from operations and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 0.6%. Since the same quarter one year prior, revenues rose by 11.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 141.66% and other important driving factors, this stock has surged by 32.82% 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, HPT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 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 78.5% when compared to the same quarter one year prior, rising from $27.57 million to $49.20 million.
  • Net operating cash flow has increased to $109.45 million or 17.29% when compared to the same quarter last year. In addition, HOSPITALITY PROPERTIES TRUST has also vastly surpassed the industry average cash flow growth rate of -55.11%.