Buy-Rated Dividend Stocks: Top 3 Companies: PFLT, AB, GBDC

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." PennantPark Floating Rate Capital Dividend Yield: 9.60% PennantPark Floating Rate Capital (NASDAQ: PFLT) shares currently have a dividend yield of 9.60%. PennantPark Floating Rate Capital Ltd. is a business development company. It seeks to make secondary direct, debt, equity, and loan investments. The fund seeks to invest through floating rate loans in private or thinly traded or small market-cap, public middle market companies. The company has a P/E ratio of 8.59. The average volume for PennantPark Floating Rate Capital has been 90,800 shares per day over the past 30 days. PennantPark Floating Rate Capital has a market cap of $317.0 million and is part of the financial services industry. Shares are up 4.1% year-to-date as of the close of trading on Monday. 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 PennantPark Floating Rate Capital 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 expanding profit margins. 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 23.1%. Since the same quarter one year prior, revenues rose by 17.1%. 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 Capital Markets industry. The net income increased by 298.9% when compared to the same quarter one year prior, rising from $0.44 million to $1.75 million.
  • PENNANTPARK FLOATING RT CAP 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, PENNANTPARK FLOATING RT CAP reported lower earnings of $0.82 versus $1.38 in the prior year. This year, the market expects an improvement in earnings ($1.03 versus $0.82).
  • The gross profit margin for PENNANTPARK FLOATING RT CAP is currently very high, coming in at 79.18%. Regardless of PFLT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PFLT's net profit margin of 19.94% compares favorably to the industry average.
  • PFLT has underperformed the S&P 500 Index, declining 14.99% 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.
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.

AllianceBernstein Dividend Yield: 8.50% AllianceBernstein (NYSE: AB) shares currently have a dividend yield of 8.50%. AllianceBernstein Holding L.P. is publicly owned investment manager. The firm also provides research services to its clients. The company has a P/E ratio of 10.44. The average volume for AllianceBernstein has been 272,800 shares per day over the past 30 days. AllianceBernstein has a market cap of $2.3 billion and is part of the financial services industry. Shares are down 0% year-to-date as of the close of trading on Monday. 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 AllianceBernstein as a buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. 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 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 89.90% significantly outperformed against the industry.
  • 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 Capital Markets industry and the overall market on the basis of return on equity, ALLIANCEBERNSTEIN HOLDING LP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Despite the weak revenue results, AB has outperformed against the industry average of 23.1%. Since the same quarter one year prior, revenues slightly dropped by 9.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income has decreased by 10.4% when compared to the same quarter one year ago, dropping from $57.67 million to $51.68 million.
  • ALLIANCEBERNSTEIN HOLDING LP's earnings per share declined by 10.2% in the most recent quarter compared to the same quarter a year ago. 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, ALLIANCEBERNSTEIN HOLDING LP increased its bottom line by earning $1.89 versus $1.86 in the prior year. For the next year, the market is expecting a contraction of 3.7% in earnings ($1.82 versus $1.89).
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.

Golub Capital BDC Dividend Yield: 7.30% Golub Capital BDC (NASDAQ: GBDC) shares currently have a dividend yield of 7.30%. Golub Capital BDC, Inc. is a business development company and operates as an externally managed closed-end non-diversified management investment company. It invests in debt and minority equity investments in middle-market companies that are, in most cases, sponsored by private equity investors. The company has a P/E ratio of 12.19. The average volume for Golub Capital BDC has been 125,500 shares per day over the past 30 days. Golub Capital BDC has a market cap of $901.7 million and is part of the financial services industry. Shares are up 5% year-to-date as of the close of trading on Monday. 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 Golub Capital BDC as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, expanding profit margins and notable return on equity. 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:

  • The revenue growth greatly exceeded the industry average of 23.1%. Since the same quarter one year prior, revenues rose by 10.7%. 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 Capital Markets industry. The net income increased by 36.0% when compared to the same quarter one year prior, rising from $15.17 million to $20.64 million.
  • Net operating cash flow has significantly increased by 156.34% to $23.02 million when compared to the same quarter last year. In addition, GOLUB CAPITAL BDC INC has also vastly surpassed the industry average cash flow growth rate of -25.38%.
  • The gross profit margin for GOLUB CAPITAL BDC INC is currently very high, coming in at 72.24%. Regardless of GBDC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GBDC's net profit margin of 67.66% significantly outperformed against the industry.
  • 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 Capital Markets industry and the overall market on the basis of return on equity, GOLUB CAPITAL BDC INC has outperformed in comparison with the industry average, but has underperformed when compared to 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. Other helpful dividend tools from TheStreet:

More from Markets

Is General Electric Stock Still Good for Your Retirement Account?

Is General Electric Stock Still Good for Your Retirement Account?

Dow Rises as Stocks Claw Back Some Losses From Sharp Selloffs

Dow Rises as Stocks Claw Back Some Losses From Sharp Selloffs

Trading Strategies: Understanding the Markets Going Into 2019

Trading Strategies: Understanding the Markets Going Into 2019

Trump-Era Budget Deficits Turn Treasury Bonds Into Unsafe Haven

Trump-Era Budget Deficits Turn Treasury Bonds Into Unsafe Haven

Be Real Slow to Jump on Oracle's Bandwagon

Be Real Slow to Jump on Oracle's Bandwagon