3 Buy-Rated Dividend Stocks Taking The Lead: SUNS, OMAB, EXLP

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."

Solar Senior Capital

Dividend Yield: 8.60%

Solar Senior Capital (NASDAQ: SUNS) shares currently have a dividend yield of 8.60%.

Solar Senior Capital Ltd. is a business development company specializing in investments in leveraged, middle-market companies in the United States. The fund invests in the form of senior secured loans, including first lien, unitranche, and second lien debt instruments. The company has a P/E ratio of 14.11.

The average volume for Solar Senior Capital has been 36,100 shares per day over the past 30 days. Solar Senior Capital has a market cap of $188.8 million and is part of the financial services industry. Shares are up 8.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Solar Senior Capital as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and increase in net income. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • SUNS's revenue growth has slightly outpaced the industry average of 5.7%. Since the same quarter one year prior, revenues slightly increased by 7.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The gross profit margin for SOLAR SENIOR CAPITAL LTD is currently very high, coming in at 76.64%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 66.51% significantly outperformed against the industry average.
  • SOLAR SENIOR CAPITAL LTD reported flat earnings per share in the most recent quarter. 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, SOLAR SENIOR CAPITAL LTD reported lower earnings of $1.02 versus $1.11 in the prior year. This year, the market expects an improvement in earnings ($1.37 versus $1.02).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Capital Markets industry average, but is greater than that of the S&P 500. The net income increased by 2.5% when compared to the same quarter one year prior, going from $3.99 million to $4.09 million.
  • In its most recent trading session, SUNS 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. 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.

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Grupo Aeroportuario del Centro Norte SAB de

Dividend Yield: 7.70%

Grupo Aeroportuario del Centro Norte SAB de (NASDAQ: OMAB) shares currently have a dividend yield of 7.70%.

Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., through its subsidiaries, develops, operates, and maintains airports in Mexico. It also operates NH T2 Hotel in Terminal 2 of the Mexico City International Airport. The company has a P/E ratio of 21.39.

The average volume for Grupo Aeroportuario del Centro Norte SAB de has been 47,500 shares per day over the past 30 days. Grupo Aeroportuario del Centro Norte SAB de has a market cap of $1.9 billion and is part of the transportation industry. Shares are up 7.7% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Grupo Aeroportuario del Centro Norte SAB de as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • The revenue growth significantly trails the industry average of 37.3%. Since the same quarter one year prior, revenues slightly increased by 5.1%. 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.
  • The gross profit margin for GRUPO AEROPORTUARIO DEL CENT is rather high; currently it is at 62.35%. It has increased from the same quarter the previous year.
  • Net operating cash flow has significantly increased by 108.38% to $33.66 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 78.39%.
  • OMAB's debt-to-equity ratio of 0.75 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 4.14 is very high and demonstrates very strong liquidity.
  • GRUPO AEROPORTUARIO DEL CENT's earnings per share declined by 15.0% 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, GRUPO AEROPORTUARIO DEL CENT reported lower earnings of $1.40 versus $1.84 in the prior year. This year, the market expects an improvement in earnings ($1.53 versus $1.40).

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Exterran Partners

Dividend Yield: 9.80%

Exterran Partners (NASDAQ: EXLP) shares currently have a dividend yield of 9.80%.

Exterran Partners, L.P., together with its subsidiaries, provides natural gas contract operations services to customers in the United States. The company has a P/E ratio of 21.29.

The average volume for Exterran Partners has been 138,000 shares per day over the past 30 days. Exterran Partners has a market cap of $1.4 billion and is part of the energy industry. Shares are up 6.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Exterran Partners as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, expanding profit margins, good cash flow from operations and growth in earnings per share. 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 greatly exceeded the industry average of 1.8%. Since the same quarter one year prior, revenues rose by 35.7%. Growth in the company's revenue appears to have helped boost 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 Energy Equipment & Services industry. The net income increased by 189.4% when compared to the same quarter one year prior, rising from $6.94 million to $20.09 million.
  • 47.45% is the gross profit margin for EXTERRAN PARTNERS LP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.22% is above that of the industry average.
  • Net operating cash flow has significantly increased by 71.94% to $78.07 million when compared to the same quarter last year. In addition, EXTERRAN PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of 12.20%.
  • EXTERRAN PARTNERS 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, EXTERRAN PARTNERS LP reported lower earnings of $0.88 versus $1.18 in the prior year. This year, the market expects an improvement in earnings ($1.09 versus $0.88).

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