Best 3 Yielding Buy-Rated Stocks: MPW, BGS, SEP

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."

Medical Properties

Dividend Yield: 6.70%

Medical Properties (NYSE: MPW) shares currently have a dividend yield of 6.70%.

Medical Properties Trust, Inc. operates as a real estate investment trust (REIT) in the United States. It acquires, develops, and invests in healthcare facilities; and leases healthcare facilities to healthcare operating companies and healthcare providers. The company has a P/E ratio of 31.48.

The average volume for Medical Properties has been 1,712,800 shares per day over the past 30 days. Medical Properties has a market cap of $2.8 billion and is part of the real estate industry. Shares are down 2.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Medical Properties as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, good cash flow from operations, increase in net income and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 31.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for MEDICAL PROPERTIES TRUST is rather high; currently it is at 66.43%. It has increased significantly from the same period last year. Along with this, the net profit margin of 37.36% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 129.87% to $42.03 million when compared to the same quarter last year. In addition, MEDICAL PROPERTIES TRUST has also vastly surpassed the industry average cash flow growth rate of 0.79%.
  • 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 395.7% when compared to the same quarter one year prior, rising from $7.24 million to $35.90 million.
  • MEDICAL PROPERTIES TRUST reported significant earnings per share improvement 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, MEDICAL PROPERTIES TRUST reported lower earnings of $0.28 versus $0.58 in the prior year. This year, the market expects an improvement in earnings ($1.03 versus $0.28).

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B&G Foods

Dividend Yield: 4.60%

B&G Foods (NYSE: BGS) shares currently have a dividend yield of 4.60%.

B&G Foods, Inc. manufactures, sells, and distributes shelf-stable food and household products in the United States, Canada, and Puerto Rico. The company has a P/E ratio of 39.14.

The average volume for B&G Foods has been 390,700 shares per day over the past 30 days. B&G Foods has a market cap of $1.6 billion and is part of the food & beverage industry. Shares are down 0.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates B&G Foods as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, growth in earnings per share and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 11.1%. 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.
  • 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 Food Products industry average. The net income increased by 10.1% when compared to the same quarter one year prior, going from $17.78 million to $19.57 million.
  • Net operating cash flow has increased to $38.68 million or 24.76% when compared to the same quarter last year. Despite an increase in cash flow of 24.76%, B&G FOODS INC is still growing at a significantly lower rate than the industry average of 79.72%.
  • B&G FOODS INC has improved earnings per share by 9.1% 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, B&G FOODS INC reported lower earnings of $0.76 versus $0.98 in the prior year. This year, the market expects an improvement in earnings ($1.49 versus $0.76).
  • BGS has underperformed the S&P 500 Index, declining 11.14% from its price level of one year ago. Despite the decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.

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Spectra Energy Partners

Dividend Yield: 4.90%

Spectra Energy Partners (NYSE: SEP) shares currently have a dividend yield of 4.90%.

Spectra Energy Partners, LP operates as an investment arm of Spectra Energy Corp. The company has a P/E ratio of 16.65.

The average volume for Spectra Energy Partners has been 192,600 shares per day over the past 30 days. Spectra Energy Partners has a market cap of $14.5 billion and is part of the energy industry. Shares are down 14.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Spectra Energy Partners as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, expanding profit margins, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 38.6%. Since the same quarter one year prior, revenues slightly increased by 4.3%. 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 significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 21.1% when compared to the same quarter one year prior, going from $242.00 million to $293.00 million.
  • The gross profit margin for SPECTRA ENERGY PARTNERS LP is rather high; currently it is at 64.85%. Regardless of SEP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SEP's net profit margin of 48.34% significantly outperformed against the industry.
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.93 is somewhat weak and could be cause for future problems.
  • SPECTRA ENERGY PARTNERS LP has improved earnings per share by 14.3% 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, SPECTRA ENERGY PARTNERS LP reported lower earnings of $2.84 versus $7.16 in the prior year. This year, the market expects an improvement in earnings ($2.93 versus $2.84).

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