3 Buy-Rated Dividend Stocks Taking The Lead: SJI, LOAN, BKCC

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

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."

South Jersey Industries

Dividend Yield: 7.50%

South Jersey Industries (NYSE: SJI) shares currently have a dividend yield of 7.50%.

South Jersey Industries, Inc., through its subsidiaries, provides energy related products and services. It engages in the purchase, transmission, and sale of natural gas. The company has a P/E ratio of 17.76.

The average volume for South Jersey Industries has been 311,100 shares per day over the past 30 days. South Jersey Industries has a market cap of $1.8 billion and is part of the utilities industry. Shares are down 9.4% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates South Jersey Industries 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 and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 20.4%. Since the same quarter one year prior, revenues slightly increased by 9.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SOUTH JERSEY INDUSTRIES INC has improved earnings per share by 6.8% 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, SOUTH JERSEY INDUSTRIES INC increased its bottom line by earning $1.47 versus $1.29 in the prior year. This year, the market expects an improvement in earnings ($1.69 versus $1.47).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Gas Utilities industry. The net income increased by 11.9% when compared to the same quarter one year prior, going from $47.90 million to $53.58 million.
  • 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 Gas Utilities industry and the overall market on the basis of return on equity, SOUTH JERSEY INDUSTRIES INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The gross profit margin for SOUTH JERSEY INDUSTRIES INC is rather low; currently it is at 24.33%. Regardless of SJI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SJI's net profit margin of 13.99% compares favorably to the industry average.

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Manhattan Bridge Capital

Dividend Yield: 7.70%

Manhattan Bridge Capital (NASDAQ: LOAN) shares currently have a dividend yield of 7.70%.

Manhattan Bridge Capital, Inc., a real estate finance company, originates, services, and manages a portfolio of first mortgage loans in the United States. The company has a P/E ratio of 13.03.

The average volume for Manhattan Bridge Capital has been 39,500 shares per day over the past 30 days. Manhattan Bridge Capital has a market cap of $25.4 million and is part of the financial services industry. Shares are up 3.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Manhattan Bridge Capital 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 attractive valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • LOAN's very impressive revenue growth greatly exceeded the industry average of 7.0%. Since the same quarter one year prior, revenues leaped by 53.1%. 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 200.00% and other important driving factors, this stock has surged by 110.26% 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 $0.29 versus $0.15 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 584.5% when compared to the same quarter one year prior, rising from $0.06 million to $0.40 million.

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BlackRock Capital Investment

Dividend Yield: 8.80%

BlackRock Capital Investment (NASDAQ: BKCC) shares currently have a dividend yield of 8.80%.

BlackRock Kelso Capital Corporation is Business Development Company specializing in investments in middle market companies. The fund invests in all industries. The company has a P/E ratio of 6.70.

The average volume for BlackRock Capital Investment has been 379,000 shares per day over the past 30 days. BlackRock Capital Investment has a market cap of $716.4 million and is part of the financial services industry. Shares are up 17.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates BlackRock Capital Investment as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 4.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Capital Markets industry and the overall market, BLACKROCK CAPITAL INVT CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for BLACKROCK CAPITAL INVT CORP is rather high; currently it is at 67.90%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 73.27% significantly outperformed against 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.
  • BLACKROCK CAPITAL INVT CORP reported flat earnings per share in the most recent quarter. 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, BLACKROCK CAPITAL INVT CORP increased its bottom line by earning $1.70 versus $1.20 in the prior year. For the next year, the market is expecting a contraction of 46.2% in earnings ($0.92 versus $1.70).

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