Top 3 Yielding Buy-Rated Stocks: BKCC, NTL, CLMT

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."

BlackRock Capital Investment

Dividend Yield: 8.90%

BlackRock Capital Investment (NASDAQ: BKCC) shares currently have a dividend yield of 8.90%.

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 6.62.

The average volume for BlackRock Capital Investment has been 341,500 shares per day over the past 30 days. BlackRock Capital Investment has a market cap of $708.1 million and is part of the financial services industry. Shares are up 15.5% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

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 solid stock price performance. 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 5.7%. 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 47.6% in earnings ($0.89 versus $1.70).

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Nortel Inversora

Dividend Yield: 11.60%

Nortel Inversora (NYSE: NTL) shares currently have a dividend yield of 11.60%.

Nortel Inversora S.A., through its subsidiary, Telecom Argentina S.A., provides fixed-line public and mobile telecommunication services. It operates through three segments: Fixed Services, Personal Mobile Services, and Nucleo Mobile Services. The company has a P/E ratio of 5.52.

The average volume for Nortel Inversora has been 2,200 shares per day over the past 30 days. Nortel Inversora has a market cap of $2.5 billion and is part of the telecommunications industry. Shares are down 11.6% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates Nortel Inversora as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth 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 2.9%. Since the same quarter one year prior, revenues slightly increased by 7.1%. 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 Diversified Telecommunication Services industry. The net income increased by 90.5% when compared to the same quarter one year prior, rising from $62.12 million to $118.36 million.
  • NORTEL INVERSORA SA has improved earnings per share by 16.7% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, NORTEL INVERSORA SA reported lower earnings of $1.14 versus $1.28 in the prior year.
  • NTL has underperformed the S&P 500 Index, declining 24.34% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Diversified Telecommunication Services industry and the overall market, NORTEL INVERSORA SA's return on equity is significantly below that of the industry average and is below that of the S&P 500.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Calumet Specialty Products Partners

Dividend Yield: 10.70%

Calumet Specialty Products Partners (NASDAQ: CLMT) shares currently have a dividend yield of 10.70%.

Calumet Specialty Products Partners, L.P. produces and sells specialty hydrocarbon products in North America. It operates in three segments: Specialty Products, Fuel Products, and Oilfield Services.

The average volume for Calumet Specialty Products Partners has been 334,900 shares per day over the past 30 days. Calumet Specialty Products Partners has a market cap of $1.9 billion and is part of the energy industry. Shares are up 14.7% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates Calumet Specialty Products Partners as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, good cash flow from operations, impressive record of earnings per share growth 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 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 147.8% when compared to the same quarter one year prior, rising from -$49.80 million to $23.80 million.
  • Net operating cash flow has significantly increased by 125.75% to $89.40 million when compared to the same quarter last year. In addition, CALUMET SPECIALTY PRODS -LP has also vastly surpassed the industry average cash flow growth rate of -53.28%.
  • CALUMET SPECIALTY PRODS -LP 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, CALUMET SPECIALTY PRODS -LP reported poor results of -$1.80 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings ($1.47 versus -$1.80).
  • Despite the weak revenue results, CLMT has outperformed against the industry average of 38.6%. Since the same quarter one year prior, revenues fell by 24.0%. The declining revenue has not hurt the company's bottom line, with increasing 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 Oil, Gas & Consumable Fuels industry and the overall market, CALUMET SPECIALTY PRODS -LP's return on equity significantly trails that of both the industry average and the S&P 500.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Other helpful dividend tools from TheStreet:

More from Markets

Jim Cramer: Kimberly Clark's Quarter Was Better Than Procter & Gamble's

Jim Cramer: Kimberly Clark's Quarter Was Better Than Procter & Gamble's

Dow Makes Move Higher as Bond Yields Hover Near 3% Threshold

Dow Makes Move Higher as Bond Yields Hover Near 3% Threshold

The Stock Market Isn't Rigged, Just Look At The Odds (VIDEO)

The Stock Market Isn't Rigged, Just Look At The Odds (VIDEO)

Let the Najarian Brothers Help You Generate Income With Options

Let the Najarian Brothers Help You Generate Income With Options

All Investors Can Trade Options, Just Ask the Najarian Brothers WATCH VIDEO

All Investors Can Trade Options, Just Ask the Najarian Brothers WATCH VIDEO