Top 3 Yielding Buy-Rated Stocks: BCE, DHT, HST

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."

BCE

Dividend Yield: 4.40%

BCE (NYSE: BCE) shares currently have a dividend yield of 4.40%.

BCE Inc. provides wireless, wireline, Internet, and television (TV) services to residential, business, and wholesale customers in Canada. The company operates through Bell Wireless, Bell Wireline, and Bell Media segments. The company has a P/E ratio of 21.62.

The average volume for BCE has been 794,300 shares per day over the past 30 days. BCE has a market cap of $40.2 billion and is part of the telecommunications industry. Shares are up 19.6% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates BCE as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, 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 generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • 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 Diversified Telecommunication Services industry average. The net income increased by 30.5% when compared to the same quarter one year prior, rising from $570.00 million to $744.00 million.
  • BCE's revenue growth trails the industry average of 18.6%. Since the same quarter one year prior, revenues slightly increased by 0.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 49.83% is the gross profit margin for BCE INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.11% is above that of the industry average.
  • Net operating cash flow has increased to $1,290.00 million or 23.44% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -3.42%.
  • BCE INC has improved earnings per share by 30.1% in the most recent quarter compared to the same quarter a year ago. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, BCE INC increased its bottom line by earning $2.98 versus $2.97 in the prior year.

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DHT Holdings

Dividend Yield: 18.50%

DHT Holdings (NYSE: DHT) shares currently have a dividend yield of 18.50%.

DHT Holdings, Inc., together with its subsidiaries, owns and operates crude oil tankers in Bermuda. As of March 16, 2016, its fleet consisted of 20 crude oil tankers, including 17 very large crude carriers (VLCC), 1 Suezmax tanker, and 2 Aframax tankers. The company has a P/E ratio of 5.21.

The average volume for DHT Holdings has been 2,068,800 shares per day over the past 30 days. DHT Holdings has a market cap of $506.0 million and is part of the transportation industry. Shares are down 33% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates DHT Holdings as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and attractive valuation levels. 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 24.6%. Since the same quarter one year prior, revenues rose by 12.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • DHT HOLDINGS INC has improved earnings per share by 30.4% 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. We feel that this trend should continue. During the past fiscal year, DHT HOLDINGS INC increased its bottom line by earning $1.03 versus $0.08 in the prior year. This year, the market expects an improvement in earnings ($1.08 versus $1.03).
  • 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 35.8% when compared to the same quarter one year prior, rising from $23.22 million to $31.53 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, DHT HOLDINGS INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.

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Host Hotels & Resorts

Dividend Yield: 5.20%

Host Hotels & Resorts (NYSE: HST) shares currently have a dividend yield of 5.20%.

Host Hotels & Resorts, Inc. is a publicly owned real estate investment trust (REIT). The firm primarily engages in the ownership and operation of hotel properties. It invests in the real estate markets of United States. The company has a P/E ratio of 18.16.

The average volume for Host Hotels & Resorts has been 9,893,000 shares per day over the past 30 days. Host Hotels & Resorts has a market cap of $11.5 billion and is part of the real estate industry. Shares are up 2.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Host Hotels & Resorts as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, reasonable valuation levels, good cash flow from operations and growth in earnings per share. We feel its strengths outweigh the fact that the company shows low profit margins.

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 Real Estate Investment Trusts (REITs) industry. The net income increased by 85.7% when compared to the same quarter one year prior, rising from $98.00 million to $182.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.9%. Since the same quarter one year prior, revenues slightly increased by 2.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has increased to $219.00 million or 26.58% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 11.95%.
  • HOST HOTELS & RESORTS INC 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, HOST HOTELS & RESORTS INC reported lower earnings of $0.74 versus $0.97 in the prior year. This year, the market expects an improvement in earnings ($0.98 versus $0.74).

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