Top 3 Yielding Buy-Rated Stocks: TLLP, RHP, PBI

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."

Tesoro Logistics

Dividend Yield: 6.70%

Tesoro Logistics (NYSE: TLLP) shares currently have a dividend yield of 6.70%.

Tesoro Logistics LP owns, operates, develops, and acquires logistics assets related to crude oil and refined products in the United States. It operates in three segments: Gathering, Processing, and Terminalling and Transportation. The company has a P/E ratio of 20.60.

The average volume for Tesoro Logistics has been 491,000 shares per day over the past 30 days. Tesoro Logistics has a market cap of $4.5 billion and is part of the energy industry. Shares are down 5.9% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Tesoro Logistics as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, compelling growth in net income, 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 24.1%. Since the same quarter one year prior, revenues rose by 14.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TESORO LOGISTICS LP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • 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 53.3% when compared to the same quarter one year prior, rising from $60.00 million to $92.00 million.
  • Net operating cash flow has slightly increased to $161.00 million or 5.92% when compared to the same quarter last year. In addition, TESORO LOGISTICS LP has also vastly surpassed the industry average cash flow growth rate of -49.95%.
  • TESORO LOGISTICS LP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, TESORO LOGISTICS LP increased its bottom line by earning $2.34 versus $1.42 in the prior year. This year, the market expects an improvement in earnings ($2.76 versus $2.34).

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Ryman Hospitality Properties

Dividend Yield: 5.80%

Ryman Hospitality Properties (NYSE: RHP) shares currently have a dividend yield of 5.80%.

Ryman Hospitality Properties, Inc. owns and operates hotels in the United States. The company has a P/E ratio of 19.99.

The average volume for Ryman Hospitality Properties has been 233,100 shares per day over the past 30 days. Ryman Hospitality Properties has a market cap of $2.6 billion and is part of the real estate industry. Shares are down 0.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Ryman Hospitality Properties as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, notable return on equity, good cash flow from operations and impressive record of earnings per share growth. 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 481.3% when compared to the same quarter one year prior, rising from $4.53 million to $26.35 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 3.1%. Growth in the company's revenue appears to have helped boost the 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 Real Estate Investment Trusts (REITs) industry and the overall market, RYMAN HOSPITALITY PPTYS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 1275.85% to $53.27 million when compared to the same quarter last year. In addition, RYMAN HOSPITALITY PPTYS INC has also vastly surpassed the industry average cash flow growth rate of 11.47%.
  • RYMAN HOSPITALITY PPTYS INC reported significant earnings per share improvement 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. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, RYMAN HOSPITALITY PPTYS INC's EPS of $2.16 remained unchanged from the prior years' EPS of $2.16. This year, the market expects an improvement in earnings ($2.82 versus $2.16).

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Pitney Bowes

Dividend Yield: 4.40%

Pitney Bowes (NYSE: PBI) shares currently have a dividend yield of 4.40%.

Pitney Bowes Inc. provides technology products and solutions in the United States and internationally. The company operates in three segments: Small & Medium Business Solutions; Enterprise Business Solutions; and Digital Commerce Solutions. The company has a P/E ratio of 9.01.

The average volume for Pitney Bowes has been 1,722,700 shares per day over the past 30 days. Pitney Bowes has a market cap of $3.2 billion and is part of the consumer durables industry. Shares are down 16.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Pitney Bowes 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 sub par growth in net income.

Highlights from the ratings report include:
  • The gross profit margin for PITNEY BOWES INC is rather high; currently it is at 63.77%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.87% trails the industry average.
  • PBI, with its decline in revenue, underperformed when compared the industry average of 6.4%. Since the same quarter one year prior, revenues slightly dropped by 5.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Commercial Services & Supplies industry and the overall market, PITNEY BOWES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • PITNEY BOWES INC's earnings per share declined by 25.0% 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, PITNEY BOWES INC increased its bottom line by earning $2.00 versus $1.48 in the prior year. For the next year, the market is expecting a contraction of 10.5% in earnings ($1.79 versus $2.00).
  • The debt-to-equity ratio is very high at 24.70 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, PBI's quick ratio is somewhat strong at 1.03, demonstrating the ability to handle short-term liquidity needs.

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