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

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."

CSI Compressco

Dividend Yield: 11.40%

CSI Compressco

(NASDAQ:

CCLP

) shares currently have a dividend yield of 11.40%.

CSI Compressco LP provides compression services and equipment for natural gas and oil production, gathering, transportation, processing, and storage applications in the United States, Latin America, Canada, and internationally. The company has a P/E ratio of 78.86.

The average volume for CSI Compressco has been 113,300 shares per day over the past 30 days. CSI Compressco has a market cap of $575.2 million and is part of the energy industry. Shares are up 32.1% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

CSI Compressco

as a

buy

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

Highlights from the ratings report include:

  • CCLP's very impressive revenue growth greatly exceeded the industry average of 0.8%. Since the same quarter one year prior, revenues leaped by 245.1%. 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 100.08% to $32.48 million when compared to the same quarter last year. In addition, CSI COMPRESSCO LP has also vastly surpassed the industry average cash flow growth rate of 13.44%.
  • 41.58% is the gross profit margin for CSI COMPRESSCO LP which we consider to be strong. Regardless of CCLP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.75% trails the industry average.
  • The debt-to-equity ratio of 1.03 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, CCLP has a quick ratio of 0.61, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market, CSI COMPRESSCO LP's return on equity significantly trails that of both the industry average and the S&P 500.

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Newtek Business Services

Dividend Yield: 10.30%

Newtek Business Services

(NASDAQ:

NEWT

) shares currently have a dividend yield of 10.30%.

Newtek Business Services Corp., a business development company, provides financial and business services to the small-and medium-sized business market in the United States and internationally. The company has a P/E ratio of 67.63.

The average volume for Newtek Business Services has been 62,000 shares per day over the past 30 days. Newtek Business Services has a market cap of $186.6 million and is part of the diversified services industry. Shares are up 23.7% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Newtek Business Services

as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, attractive valuation levels and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 390.00% and other important driving factors, this stock has surged by 37.02% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NEWT should continue to move higher despite the fact that it has already enjoyed a very nice gain 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 Capital Markets industry. The net income increased by 619.1% when compared to the same quarter one year prior, rising from $1.39 million to $10.00 million.
  • NEWTEK BUSINESS SERVICES CP reported significant earnings per share improvement in the most recent quarter compared to 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, NEWTEK BUSINESS SERVICES CP reported lower earnings of $0.59 versus $1.00 in the prior year. This year, the market expects an improvement in earnings ($1.83 versus $0.59).
  • NEWT, with its very weak revenue results, has greatly underperformed against the industry average of 5.9%. Since the same quarter one year prior, revenues plummeted by 86.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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New Mountain Finance

Dividend Yield: 9.40%

New Mountain Finance

(NYSE:

NMFC

) shares currently have a dividend yield of 9.40%.

New Mountain Finance Corporation is a Business Development Company specializing in investments in middle market companies and debt securities at various levels of the capital structure, including first and second lien debt, unsecured notes, bonds, and mezzanine securities. The company has a P/E ratio of 10.10.

The average volume for New Mountain Finance has been 221,600 shares per day over the past 30 days. New Mountain Finance has a market cap of $844.4 million and is part of the financial services industry. Shares are down 2.7% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

New Mountain Finance

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 lackluster performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 5.9%. Since the same quarter one year prior, revenues rose by 20.0%. 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.
  • The gross profit margin for NEW MOUNTAIN FINANCE CORP is rather high; currently it is at 67.57%. It has increased significantly from the same period last year. Along with this, the net profit margin of 62.71% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 166.27% to $24.27 million when compared to the same quarter last year. Despite an increase in cash flow, NEW MOUNTAIN FINANCE CORP's cash flow growth rate is still lower than the industry average growth rate of 188.71%.
  • NEW MOUNTAIN FINANCE CORP's earnings per share declined by 26.0% 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 two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, NEW MOUNTAIN FINANCE CORP reported lower earnings of $0.87 versus $1.79 in the prior year. This year, the market expects an improvement in earnings ($1.37 versus $0.87).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Capital Markets industry average, but is greater than that of the S&P 500. The net income has decreased by 2.3% when compared to the same quarter one year ago, dropping from $23.45 million to $22.91 million.

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