NEW YORK ( TheStreet) -- Looking for yield? Think financial services stocks now that the Federal Reserve's annual stress tests are completed.

The sector once paid the highest total dividends of the entire S&P 500, when it represented 30% of dividends paid by stocks in the group. Following last week's stress test approvals, a total of 20 banks and financial firms boosted their dividends and stock buybacks and will and account for nearly 15% of dividend payments this year, putting it back on top (it narrowly beats out the technology sector). 

Even with the dividend increases, there are other companies within financial services that offer better yield than most banks do, such as real estate investment trusts, investment management firms, even insurance firms, according to TheStreet Ratings, TheStreet's proprietary research tool.

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 stocks on this list are all buys, with A- or better ratings within the financial services sector.

Check out which financial services stocks you should buy for yield. Year-to-date returns are based on March 16, 2015 closing prices.


ADC Chart ADC data by YCharts

1. Agree Realty Corp. (ADC - Get Report)
Rating: Buy, A-
Market Cap: $575.9 million
Annual Dividend Yield: 5.5%
Year-to-date return: 23.3%

Agree Realty Corporation, a real estate investment trust (REIT), engages in the ownership, development, acquisition, and management of retail properties, which are primarily leased to national and regional retail companies in the United States.

"We rate AGREE REALTY CORP (ADC) 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, increase in stock price during the past year, expanding profit margins and increase in net income. 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:

  • The revenue growth came in higher than the industry average of 10.0%. Since the same quarter one year prior, revenues rose by 22.3%. 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.
  • 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.
  • The gross profit margin for AGREE REALTY CORP is rather high; currently it is at 58.91%. Regardless of ADC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ADC's net profit margin of 39.08% compares favorably to the industry average.
  • AGREE REALTY CORP's earnings per share declined by 7.7% 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 year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, AGREE REALTY CORP reported lower earnings of $1.23 versus $1.41 in the prior year. This year, the market expects an improvement in earnings ($1.54 versus $1.23).
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Real Estate Investment Trusts (REITs) industry average. The net income increased by 2.0% when compared to the same quarter one year prior, going from $5.49 million to $5.60 million.

 

 

ARCC Chart ARCC data by YCharts

2. Ares Capital Corp. (ARCC - Get Report)
Rating: Buy, A-
Market Cap: $5.3 Billion
Annual Dividend Yield: 9.06%
Year-to-date return: 7.1%

Ares Capital Corporation is a business development company specializing in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle market companies. It also makes growth capital and general refinancing.

"We rate ARES CAPITAL CORP (ARCC) 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, increase in net income, good cash flow from operations, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • The revenue growth came in higher than the industry average of 13.0%. Since the same quarter one year prior, revenues rose by 15.9%. 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 exceeded that of the S&P 500 and the Capital Markets industry average. The net income increased by 14.6% when compared to the same quarter one year prior, going from $133.88 million to $153.39 million.
  • Net operating cash flow has significantly increased by 83.93% to -$30.82 million when compared to the same quarter last year. In addition, ARES CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of 3.62%.
  • The gross profit margin for ARES CAPITAL CORP is rather high; currently it is at 69.02%. Regardless of ARCC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ARCC's net profit margin of 56.61% significantly outperformed against the industry.
  • ARES CAPITAL CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ARES CAPITAL CORP increased its bottom line by earning $1.93 versus $1.81 in the prior year. For the next year, the market is expecting a contraction of 16.3% in earnings ($1.62 versus $1.93).

 

  CXW Chart CXW data by YCharts

3. Corrections Corporation of America (CXW - Get Report)
Rating: Buy, A-
Market Cap: $4.6 Billion
Annual Dividend Yield: 5.15%
Year-to-date return: 8.1%

Corrections Corporation of America, together with its subsidiaries, owns and operates privatized correctional and detention facilities in the United States.

"We rate CORRECTIONS CORP AMER (CXW) 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 reasonable valuation levels, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub-par growth in net income."

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

  • Net operating cash flow has significantly increased by 103.59% to $174.89 million when compared to the same quarter last year. In addition, CORRECTIONS CORP AMER has also vastly surpassed the industry average cash flow growth rate of 10.56%.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite 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.
  • CORRECTIONS CORP AMER's earnings per share declined by 39.0% 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 year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CORRECTIONS CORP AMER reported lower earnings of $1.66 versus $2.86 in the prior year. This year, the market expects an improvement in earnings ($1.98 versus $1.66).
  • CXW, with its decline in revenue, underperformed when compared the industry average of 10.0%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

 

KKR Chart KKR data by YCharts

4. KKR & Co. (KKR - Get Report)
Rating: Buy, A-
Market Cap: $10 Billion
Annual Dividend Yield: 8.81%
Year-to-date return: -1.2%

KKR & Co. L.P. is a private equity and real estate investment firm specializing in direct and fund of fund investments. It specializes in acquisitions, leveraged buyouts, management buyouts, credit special situations, growth equity, mature, mezzanine, distressed, and middle market investments.

"We rate KKR & CO LP (KKR) 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. Among the primary strengths of the company is its expanding profit margins over time. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • KKR & CO 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, KKR & CO LP reported lower earnings of $1.28 versus $2.29 in the prior year. This year, the market expects an improvement in earnings ($2.62 versus $1.28).
  • KKR, with its very weak revenue results, has greatly underperformed against the industry average of 13.0%. Since the same quarter one year prior, revenues plummeted by 68.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 48.35% is the gross profit margin for KKR & CO 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, KKR's net profit margin of -0.04% significantly underperformed when compared to the industry average.
  • 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 significantly decreased by 100.2% when compared to the same quarter one year ago, falling from $277.91 million to -$0.58 million.
  • In its most recent trading session, KKR has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Despite the stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.

 

GEO Chart GEO data by YCharts

5. Geo Group Inc. (GEO - Get Report)
Rating: Buy, A
Market Cap: $3.2 Billion
Annual Dividend Yield: 5.81%
Year-to-date return: 3.7%

The GEO Group, Inc. provides government-outsourced services specializing in the management of correctional, detention, and re-entry facilities, and the provision of community based services and youth services in the United States, Australia, South Africa, the United Kingdom, and Canada.

"We rate GEO GROUP INC (GEO) 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, 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 analysis by TheStreet Ratings Team goes as follows:

  • GEO's revenue growth has slightly outpaced the industry average of 10.0%. 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 36.84% and other important driving factors, this stock has surged by 32.39% 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, GEO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • GEO GROUP INC has improved earnings per share by 36.8% 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 year. We feel that this trend should continue. During the past fiscal year, GEO GROUP INC increased its bottom line by earning $1.99 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($2.06 versus $1.99).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 37.8% when compared to the same quarter one year prior, rising from $27.61 million to $38.05 million.

 

 

HPT Chart HPT data by YCharts

6. Hospitality Properties Trust (HPT - Get Report)
Rating: Buy, A
Market Cap: $5 Billion
Annual Dividend Yield: 6.2%
Year-to-date return: 0.88%

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

"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, 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 analysis by TheStreet Ratings Team goes as follows:

  • HPT's revenue growth has slightly outpaced the industry average of 10.0%. Since the same quarter one year prior, revenues rose by 11.9%. 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.
  • HOSPITALITY PROPERTIES TRUST 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, HOSPITALITY PROPERTIES TRUST increased its bottom line by earning $1.18 versus $0.73 in the prior year. This year, the market expects an improvement in earnings ($1.42 versus $1.18).
  • 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 Real Estate Investment Trusts (REITs) industry average. The net income increased by 72.6% when compared to the same quarter one year prior, rising from $32.75 million to $56.52 million.

 

LOAN Chart LOAN data by YCharts

7. Manhattan Bridge Capital Inc. (LOAN - Get Report)
Rating: Buy, A
Market Cap: $22.1 Million
Annual Dividend Yield: 7.67%
Year-to-date return: -7%

Manhattan Bridge Capital, Inc. provides short-term, secured, and non-banking loans to real estate investors to fund their acquisition and construction of properties in the New York Metropolitan area.

"We rate MANHATTAN BRIDGE CAPITAL INC (LOAN) 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, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. 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 analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 2.4%. Since the same quarter one year prior, revenues rose by 30.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Powered by its strong earnings growth of 60.00% and other important driving factors, this stock has surged by 101.65% 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, LOAN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • MANHATTAN BRIDGE CAPITAL INC 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. During the past fiscal year, MANHATTAN BRIDGE CAPITAL INC increased its bottom line by earning $0.15 versus $0.10 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Financial Services industry. The net income increased by 121.1% when compared to the same quarter one year prior, rising from $0.19 million to $0.43 million.

 

LTC Chart LTC data by YCharts

8. LTC Properties (LTC - Get Report)
Rating: Buy, A
Market Cap: $1.5 Billion
Annual Dividend Yield: 4.69%
Year-to-date return: -1.8%

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

"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 solid stock price performance, compelling growth in net income, revenue growth, expanding profit margins and good cash flow from operations. 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 analysis by TheStreet Ratings Team goes as follows:

  • 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 net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 43.3% when compared to the same quarter one year prior, rising from $14.65 million to $21.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.0%. Since the same quarter one year prior, revenues slightly increased by 7.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for LTC PROPERTIES INC is rather high; currently it is at 67.84%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 68.28% significantly outperformed against the industry average.
  • Net operating cash flow has slightly increased to $26.48 million or 1.73% when compared to the same quarter last year. Despite an increase in cash flow, LTC PROPERTIES INC's average is still marginally south of the industry average growth rate of 10.56%.

 

SAFT Chart SAFT data by YCharts

9. Safety Insurance Group Inc. (SAFT - Get Report)
Rating: Buy, A+
Market Cap: $888.4 Million
Annual Dividend Yield: 4.73%
Year-to-date return: -8.1%

Safety Insurance Group, Inc. provides private passenger automobile insurance products primarily in Massachusetts and New Hampshire.

"We rate SAFETY INSURANCE GROUP INC (SAFT) 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, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."

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

  • SAFT's revenue growth has slightly outpaced the industry average of 5.4%. Since the same quarter one year prior, revenues slightly increased by 3.2%. 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.
  • SAFT 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.
  • 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The change in net income from the same quarter one year ago has exceeded that of the Insurance industry average, but is less than that of the S&P 500. The net income has decreased by 11.0% when compared to the same quarter one year ago, dropping from $11.65 million to $10.37 million.

 

 

AB Chart AB data by YCharts

10. Alliance Bernstein Holding LP (AB - Get Report)
Rating: Buy, A+
Market Cap: $2.8 Billion
Annual Dividend Yield: 6.37%
Year-to-date return: 13.6%

AllianceBernstein Holding L.P. provides investment management and related services in the United States and internationally.

"We rate ALLIANCEBERNSTEIN HOLDING LP (AB) 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, good cash flow from operations, expanding profit margins, solid stock price performance and increase in net income. 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 analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 13.0%. Since the same quarter one year prior, revenues slightly increased by 0.9%. 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 increased to $43.24 million or 32.95% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.62%.
  • ALLIANCEBERNSTEIN HOLDING LP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, ALLIANCEBERNSTEIN HOLDING LP increased its bottom line by earning $1.86 versus $1.72 in the prior year. This year, the market expects an improvement in earnings ($2.06 versus $1.86).
  • The gross profit margin for ALLIANCEBERNSTEIN HOLDING LP is currently very high, coming in at 100.00%. AB has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, AB's net profit margin of 90.72% significantly outperformed against the industry.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite 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.

 

BX Chart BX data by YCharts

11. Blackstone Group LP (BX - Get Report)
Rating: Buy, A+
Market Cap: $20.1 Billion
Annual Dividend Yield: 4.96%
Year-to-date return: 12.9%

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.

"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 solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par 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 13.0%. 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 against the S&P 500 and did not exceed that of 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.