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."

LTC Properties

Dividend Yield: 5.00%

LTC Properties

(NYSE:

LTC

) shares currently have a dividend yield of 5.00%.

LTC Properties, Inc. operates as a health care real estate investment trust (REIT) in the United States. The company has a P/E ratio of 21.34.

The average volume for LTC Properties has been 201,000 shares per day over the past 30 days. LTC Properties has a market cap of $1.5 billion and is part of the real estate industry. Shares are down 0.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

LTC Properties

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, expanding profit margins, good cash flow from operations and growth in earnings per share. 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 6.1%. Since the same quarter one year prior, revenues rose by 18.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for LTC PROPERTIES INC is currently very high, coming in at 78.92%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 56.22% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $26.58 million or 10.50% when compared to the same quarter last year. In addition, LTC PROPERTIES INC has also modestly surpassed the industry average cash flow growth rate of 9.45%.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 14.7% when compared to the same quarter one year prior, going from $17.12 million to $19.65 million.
  • LTC PROPERTIES INC has improved earnings per share by 13.0% 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, LTC PROPERTIES INC increased its bottom line by earning $1.99 versus $1.56 in the prior year. For the next year, the market is expecting a contraction of 0.5% in earnings ($1.98 versus $1.99).

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Nucor

Dividend Yield: 4.20%

Nucor

(NYSE:

NUE

) shares currently have a dividend yield of 4.20%.

Nucor Corporation manufactures and sells steel and steel products in the United States and internationally. It operates through three segments: Steel Mills, Steel Products, and Raw Materials. The company has a P/E ratio of 18.53.

The average volume for Nucor has been 2,378,600 shares per day over the past 30 days. Nucor has a market cap of $11.6 billion and is part of the metals & mining industry. Shares are down 9.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Nucor

as a

buy

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has increased to $562.60 million or 16.66% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -25.53%.
  • Despite currently having a low debt-to-equity ratio of 0.58, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that NUE's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.01 is high and demonstrates strong liquidity.
  • Despite the weak revenue results, NUE has outperformed against the industry average of 45.8%. Since the same quarter one year prior, revenues fell by 25.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Metals & Mining industry average. The net income has decreased by 7.5% when compared to the same quarter one year ago, dropping from $245.45 million to $227.13 million.
  • NUCOR CORP's earnings per share declined by 6.6% 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, NUCOR CORP increased its bottom line by earning $2.22 versus $1.52 in the prior year. For the next year, the market is expecting a contraction of 30.4% in earnings ($1.55 versus $2.22).

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Exelon

Dividend Yield: 4.40%

Exelon

(NYSE:

EXC

) shares currently have a dividend yield of 4.40%.

Exelon Corporation, a utility services holding company, engages in the energy generation and delivery businesses in the United States. It owns electric generating facilities, such as nuclear, fossil, and hydroelectric generation facilities, as well as wind and solar photovoltaic facilities. The company has a P/E ratio of 12.53.

The average volume for Exelon has been 7,732,100 shares per day over the past 30 days. Exelon has a market cap of $25.8 billion and is part of the utilities industry. Shares are up 0.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Exelon

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • EXC's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 7.1%. 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.
  • Even though the current debt-to-equity ratio is 1.03, it is still below the industry average, suggesting that this level of debt is acceptable within the Electric Utilities industry. Despite the fact that EXC's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.52 is high and demonstrates strong liquidity.
  • EXELON CORP's earnings per share declined by 40.0% 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 year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, EXELON CORP reported lower earnings of $1.87 versus $2.00 in the prior year. This year, the market expects an improvement in earnings ($2.52 versus $1.87).
  • The share price of EXELON CORP has not done very well: it is down 23.89% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.

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