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."

KCAP Financial

Dividend Yield: 12.30%

KCAP Financial

(NASDAQ:

KCAP

) shares currently have a dividend yield of 12.30%.

KCAP Financial, Inc. is a private equity and venture capital firm specializing in mid market, buyouts, and mezzanine investments. It focuses on mature and middle market companies. The company has a P/E ratio of 20.87.

The average volume for KCAP Financial has been 246,500 shares per day over the past 30 days. KCAP Financial has a market cap of $271.6 million and is part of the financial services industry. Shares are up 0.9% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates

KCAP Financial

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 these 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 5.2%. Since the same quarter one year prior, revenues rose by 17.5%. 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 KCAP FINANCIAL INC is currently very high, coming in at 81.05%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.71% is above that of the industry average.
  • Net operating cash flow has significantly increased by 125.25% to $9.86 million when compared to the same quarter last year. In addition, KCAP FINANCIAL INC has also vastly surpassed the industry average cash flow growth rate of 8.73%.
  • KCAP FINANCIAL 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. 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, KCAP FINANCIAL INC reported lower earnings of $0.53 versus $0.91 in the prior year. This year, the market expects an improvement in earnings ($0.99 versus $0.53).
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.38%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 58.33% compared to the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.

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

TICC Capital

Dividend Yield: 12.00%

TICC Capital

(NASDAQ:

TICC

) shares currently have a dividend yield of 12.00%.

TICC Capital Corp., a business development company, operates as a closed-end, non-diversified management investment company. The firm invests in both public and private companies. The company has a P/E ratio of 10.58.

The average volume for TICC Capital has been 665,700 shares per day over the past 30 days. TICC Capital has a market cap of $579.9 million and is part of the financial services industry. Shares are down 6.9% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates

TICC Capital

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 5.2%. Since the same quarter one year prior, revenues rose by 31.9%. 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 TICC CAPITAL CORP is currently very high, coming in at 79.09%. It has increased significantly from the same period last year. Along with this, the net profit margin of 46.27% significantly outperformed against the industry average.
  • TICC CAPITAL CORP's earnings per share declined by 43.9% 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, TICC CAPITAL CORP reported lower earnings of $1.11 versus $1.77 in the prior year. This year, the market expects an improvement in earnings ($1.16 versus $1.11).
  • In its most recent trading session, TICC has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • 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 Capital Markets industry. The net income has significantly decreased by 36.4% when compared to the same quarter one year ago, falling from $20.84 million to $13.26 million.

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

Navios Maritime Partners L.P

Dividend Yield: 9.50%

Navios Maritime Partners L.P

(NYSE:

NMM

) shares currently have a dividend yield of 9.50%.

Navios Maritime Partners L.P. is engaged in the ownership and operation of dry cargo vessels in Europe, Asia, North America, and Australia. The company has a P/E ratio of 22.10.

The average volume for Navios Maritime Partners L.P has been 452,500 shares per day over the past 30 days. Navios Maritime Partners L.P has a market cap of $1.4 billion and is part of the transportation industry. Shares are down 2.9% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates

Navios Maritime Partners L.P

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • NMM's revenue growth has slightly outpaced the industry average of 7.3%. Since the same quarter one year prior, revenues rose by 12.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Net operating cash flow has increased to $36.28 million or 23.44% when compared to the same quarter last year. In addition, NAVIOS MARITIME PARTNERS LP has also modestly surpassed the industry average cash flow growth rate of 19.39%.
  • The gross profit margin for NAVIOS MARITIME PARTNERS LP is currently very high, coming in at 92.11%. Regardless of NMM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NMM's net profit margin of 32.59% significantly outperformed against the industry.
  • The net income growth from the same quarter one year ago has exceeded that of the Marine industry average, but is less than that of the S&P 500. The net income increased by 13.0% when compared to the same quarter one year prior, going from $16.25 million to $18.36 million.
  • NMM's debt-to-equity ratio of 0.67 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 9.04 is very high and demonstrates very strong liquidity.

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

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