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 or Stephanie Link.

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."

Canon

Dividend Yield: 4.10%

Canon

(NYSE:

CAJ

) shares currently have a dividend yield of 4.10%.

Canon Inc. manufactures and sells office multifunction devices (MFDs), plain paper copying machines, laser printers, inkjet printers, cameras, and lithography equipment. The company has a P/E ratio of 12.79.

The average volume for Canon has been 329,000 shares per day over the past 30 days. Canon has a market cap of $34.6 billion and is part of the consumer durables industry. Shares are up 1.2% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates

Canon

as a

buy

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • CAJ's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The gross profit margin for CANON INC is rather high; currently it is at 54.87%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CAJ's net profit margin of 6.24% significantly trails the industry average.
  • CANON INC's earnings per share declined by 11.4% 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, CANON INC's EPS of $1.91 remained unchanged from the prior years' EPS of $1.91. This year, the market expects an improvement in earnings ($2.03 versus $1.91).
  • The revenue fell significantly faster than the industry average of 30.6%. Since the same quarter one year prior, revenues fell by 15.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

UIL Holdings

Dividend Yield: 4.10%

UIL Holdings

(NYSE:

UIL

) shares currently have a dividend yield of 4.10%.

UIL Holdings Corporation, through its subsidiaries, operates in the regulated utility businesses. The company operates in the Electric Distribution, Electric Transmission, and Gas Distribution segments. The company has a P/E ratio of 20.61.

The average volume for UIL Holdings has been 349,500 shares per day over the past 30 days. UIL Holdings has a market cap of $2.4 billion and is part of the utilities industry. Shares are down 0.2% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates

UIL Holdings

as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income and good cash flow from operations. We feel these 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:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • UIL HOLDINGS CORP reported significant earnings per share improvement 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 year. We feel that this trend should continue. During the past fiscal year, UIL HOLDINGS CORP increased its bottom line by earning $2.18 versus $2.02 in the prior year. This year, the market expects an improvement in earnings ($2.25 versus $2.18).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electric Utilities industry. The net income increased by 142.5% when compared to the same quarter one year prior, rising from $5.16 million to $12.50 million.
  • Net operating cash flow has increased to $42.79 million or 26.83% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.44%.
  • UIL, with its decline in revenue, underperformed when compared the industry average of 12.3%. Since the same quarter one year prior, revenues slightly dropped by 7.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Kinder Morgan

Dividend Yield: 4.40%

Kinder Morgan

(NYSE:

KMI

) shares currently have a dividend yield of 4.40%.

Kinder Morgan, Inc. operates as a midstream and energy company in North America. It operates through Natural Gas Pipelines, CO2 KMP, Products Pipelines KMP, Terminals KMP, Kinder Morgan Canada KMP, and Other segments. The company has a P/E ratio of 46.29.

The average volume for Kinder Morgan has been 25,281,100 shares per day over the past 30 days. Kinder Morgan has a market cap of $87.6 billion and is part of the energy industry. Shares are down 1.8% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates

Kinder Morgan

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 21.4%. Since the same quarter one year prior, revenues slightly increased by 2.0%. 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.
  • 44.29% is the gross profit margin for KINDER MORGAN INC which we consider to be strong. 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 3.18% trails the industry average.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • KINDER MORGAN INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, KINDER MORGAN INC reported lower earnings of $0.95 versus $1.15 in the prior year. For the next year, the market is expecting a contraction of 6.8% in earnings ($0.89 versus $0.95).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 62.7% when compared to the same quarter one year ago, falling from $338.00 million to $126.00 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Other helpful dividend tools from TheStreet:

null