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."

Alcentra Capital

Dividend Yield: 11.20%

Alcentra Capital

(NASDAQ:

ABDC

) shares currently have a dividend yield of 11.20%.

Alcentra Capital Corporation is a business development company specializing in investments in lower middle-market companies. The company has a P/E ratio of 8.42.

The average volume for Alcentra Capital has been 32,000 shares per day over the past 30 days. Alcentra Capital has a market cap of $164.2 million and is part of the financial services industry. Shares are up 4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Alcentra Capital

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 24.4%. Since the same quarter one year prior, revenues rose by 20.9%. 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 ALCENTRA CAPITAL CORP is currently very high, coming in at 72.17%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 43.37% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 1172.98% to $19.30 million when compared to the same quarter last year. In addition, ALCENTRA CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of -202.54%.
  • ALCENTRA CAPITAL CORP's earnings per share declined by 13.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, ALCENTRA CAPITAL CORP reported lower earnings of $0.93 versus $1.35 in the prior year. This year, the market expects an improvement in earnings ($1.47 versus $0.93).
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Capital Markets industry average, but is less than that of the S&P 500. The net income has decreased by 13.6% when compared to the same quarter one year ago, dropping from $4.99 million to $4.31 million.

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Ciner Resources

Dividend Yield: 7.90%

Ciner Resources

(NYSE:

CINR

) shares currently have a dividend yield of 7.90%.

Ciner Resources LP engages in the trona ore mining and soda ash production businesses in the United States and internationally. It processes trona ore into soda ash, which is a raw material in flat glass, container glass, detergents, chemicals, paper, and other consumer and industrial products. The company has a P/E ratio of 11.40.

The average volume for Ciner Resources has been 46,800 shares per day over the past 30 days. Ciner Resources has a market cap of $561.3 million and is part of the metals & mining industry. Shares are up 28.7% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Ciner Resources

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, attractive valuation levels, good cash flow from operations, notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • The debt-to-equity ratio is somewhat low, currently at 0.67, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, CINR has a quick ratio of 2.38, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has slightly increased to $36.80 million or 6.05% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -20.51%.
  • 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. In comparison to other companies in the Chemicals industry and the overall market on the basis of return on equity, CINER RESOURCES LP has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • 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. 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.

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Fidus Investment

Dividend Yield: 10.60%

Fidus Investment

(NASDAQ:

FDUS

) shares currently have a dividend yield of 10.60%.

Fidus Investment Corporation operates as an externally managed, closed-end, and non-diversified management investment company. The company provides customized debt and equity financing solutions to lower middle-market companies in the United States. The company has a P/E ratio of 6.87.

The average volume for Fidus Investment has been 62,600 shares per day over the past 30 days. Fidus Investment has a market cap of $240.8 million and is part of the financial services industry. Shares are up 7.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Fidus Investment

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, compelling growth in net income, expanding profit margins 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:

  • The revenue growth greatly exceeded the industry average of 24.4%. Since the same quarter one year prior, revenues rose by 14.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • FIDUS INVESTMENT CORP has improved earnings per share by 15.0% 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, FIDUS INVESTMENT CORP increased its bottom line by earning $1.61 versus $1.34 in the prior year. This year, the market expects an improvement in earnings ($1.62 versus $1.61).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 17.6% when compared to the same quarter one year prior, going from $6.41 million to $7.54 million.
  • The gross profit margin for FIDUS INVESTMENT CORP is rather high; currently it is at 66.07%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 51.32% significantly outperformed against the industry average.
  • Net operating cash flow has increased to -$8.43 million or 34.30% when compared to the same quarter last year. In addition, FIDUS INVESTMENT CORP has also vastly surpassed the industry average cash flow growth rate of -202.54%.

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