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."

OFS Capital

Dividend Yield: 12.40%

OFS Capital

(NASDAQ:

OFS

) shares currently have a dividend yield of 12.40%.

OFS Capital Corporation is a business development company specializing in direct and fund investments. For direct, it specializes in debt and structured equity investments in lower middle market companies. The fund invests in companies based in United States. The company has a P/E ratio of 9.79.

The average volume for OFS Capital has been 32,300 shares per day over the past 30 days. OFS Capital has a market cap of $106.3 million and is part of the financial services industry. Shares are down 4.7% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

OFS Capital

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, notable return on equity and expanding profit margins. 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 revenue growth came in higher than the industry average of 4.3%. Since the same quarter one year prior, revenues rose by 24.1%. 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.
  • Net operating cash flow has significantly increased by 129.99% to $9.08 million when compared to the same quarter last year. In addition, OFS CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of -98.58%.
  • 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 Capital Markets industry and the overall market on the basis of return on equity, OFS CAPITAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • OFS CAPITAL CORP 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. 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, OFS CAPITAL CORP increased its bottom line by earning $1.03 versus $0.81 in the prior year. This year, the market expects an improvement in earnings ($1.29 versus $1.03).
  • The gross profit margin for OFS CAPITAL CORP is rather high; currently it is at 63.25%. Regardless of OFS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OFS's net profit margin of 18.48% compares favorably to the industry average.

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BlackRock Capital Investment

Dividend Yield: 9.70%

BlackRock Capital Investment

(NASDAQ:

BKCC

) shares currently have a dividend yield of 9.70%.

BlackRock Capital Investment Corporation, formerly known as BlackRock Kelso Capital Corporation, is a Business Development Company specializing in investments in middle market companies. The fund invests in all industries. The company has a P/E ratio of 6.03.

The average volume for BlackRock Capital Investment has been 401,900 shares per day over the past 30 days. BlackRock Capital Investment has a market cap of $639.9 million and is part of the financial services industry. Shares are down 6.9% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

BlackRock Capital Investment

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, solid stock price performance 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:

  • BKCC's revenue growth has slightly outpaced the industry average of 4.3%. Since the same quarter one year prior, revenues slightly increased by 2.3%. 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.
  • The gross profit margin for BLACKROCK CAPITAL INVT CORP is currently very high, coming in at 88.43%. It has increased significantly from the same period last year. Along with this, the net profit margin of 64.01% significantly outperformed against the industry average.
  • Compared to where it was trading a year ago, BKCC's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed results. 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.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Capital Markets industry and the overall market, BLACKROCK CAPITAL INVT CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • BLACKROCK CAPITAL INVT CORP's earnings per share declined by 22.2% 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, BLACKROCK CAPITAL INVT CORP increased its bottom line by earning $1.70 versus $1.20 in the prior year. For the next year, the market is expecting a contraction of 44.1% in earnings ($0.95 versus $1.70).

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Jacksonville Bancorp

Dividend Yield: 13.10%

Jacksonville Bancorp

(NASDAQ:

JXSB

) shares currently have a dividend yield of 13.10%.

Jacksonville Bancorp, Inc. operates as the holding company for Jacksonville Savings Bank that provides various banking products and services in Illinois. The company has a P/E ratio of 14.66.

The average volume for Jacksonville Bancorp has been 1,000 shares per day over the past 30 days. Jacksonville Bancorp has a market cap of $43.6 million and is part of the banking industry. Shares are down 9.5% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Jacksonville Bancorp

as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, growth in earnings per share and notable return on equity. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income increased by 8.0% when compared to the same quarter one year prior, going from $0.65 million to $0.70 million.
  • JACKSONVILLE BANCORP INC/MD has improved earnings per share by 8.3% 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. During the past fiscal year, JACKSONVILLE BANCORP INC/MD increased its bottom line by earning $1.69 versus $1.65 in the prior year.
  • 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 Thrifts & Mortgage Finance industry and the overall market, JACKSONVILLE BANCORP INC/MD's return on equity is below that of both the industry average and the S&P 500.

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