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."

Welltower

Dividend Yield: 5.00%

Welltower

(NYSE:

HCN

) shares currently have a dividend yield of 5.00%.

Welltower Inc. is an independent equity real estate investment trust. The firm engages in acquiring, planning, developing, managing, repositioning and monetizing of real estate assets. It primarily invests in the real estate markets of the United States. The company has a P/E ratio of 25.74.

The average volume for Welltower has been 2,519,800 shares per day over the past 30 days. Welltower has a market cap of $23.4 billion and is part of the real estate industry. Shares are down 11.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Welltower

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, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • HCN's revenue growth has slightly outpaced the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 15.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • WELLTOWER INC has improved earnings per share by 18.2% 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, WELLTOWER INC increased its bottom line by earning $1.40 versus $0.09 in the prior year. This year, the market expects an improvement in earnings ($2.47 versus $1.40).
  • 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 Real Estate Investment Trusts (REITs) industry average. The net income increased by 30.0% when compared to the same quarter one year prior, rising from $152.61 million to $198.40 million.
  • Net operating cash flow has significantly increased by 61.22% to $416.98 million when compared to the same quarter last year. In addition, WELLTOWER INC has also vastly surpassed the industry average cash flow growth rate of 9.44%.

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Magellan Midstream Partners

Dividend Yield: 4.60%

Magellan Midstream Partners

(NYSE:

MMP

) shares currently have a dividend yield of 4.60%.

Magellan Midstream Partners, L.P. engages in the transportation, storage, and distribution of refined petroleum products and crude oil in the United States. It operates in three segments: Refined Products, Crude Oil, and Marine Storage. The company has a P/E ratio of 18.51.

The average volume for Magellan Midstream Partners has been 1,229,900 shares per day over the past 30 days. Magellan Midstream Partners has a market cap of $15.1 billion and is part of the energy industry. Shares are down 16.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Magellan Midstream Partners

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, good cash flow from operations and increase in net income. 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 revenue growth greatly exceeded the industry average of 36.9%. Since the same quarter one year prior, revenues rose by 10.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, MAGELLAN MIDSTREAM PRTNRS LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for MAGELLAN MIDSTREAM PRTNRS LP is rather high; currently it is at 61.29%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 43.47% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $309.29 million or 31.07% when compared to the same quarter last year. In addition, MAGELLAN MIDSTREAM PRTNRS LP has also vastly surpassed the industry average cash flow growth rate of -26.70%.
  • 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 26.4% when compared to the same quarter one year prior, rising from $198.62 million to $250.97 million.

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RLJ Lodging

Dividend Yield: 6.00%

RLJ Lodging

(NYSE:

RLJ

) shares currently have a dividend yield of 6.00%.

RLJ Lodging Trust is an independent equity real estate investment trust. The firm also manages real estate funds. It invests in the real estate markets of the United States. The firm primarily invests in premium-branded, focused service, and compact full-service hotels. The company has a P/E ratio of 16.09.

The average volume for RLJ Lodging has been 1,282,800 shares per day over the past 30 days. RLJ Lodging has a market cap of $2.8 billion and is part of the real estate industry. Shares are down 33% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

RLJ Lodging

as a

buy

. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, reasonable valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • RLJ LODGING TRUST has improved earnings per share by 10.7% 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, RLJ LODGING TRUST increased its bottom line by earning $1.05 versus $0.87 in the prior year. This year, the market expects an improvement in earnings ($1.37 versus $1.05).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 10.4% when compared to the same quarter one year prior, going from $36.76 million to $40.59 million.
  • RLJ, with its decline in revenue, slightly underperformed the industry average of 6.1%. Since the same quarter one year prior, revenues slightly dropped by 2.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, RLJ LODGING TRUST's return on equity is below that of both the industry average and the S&P 500.

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