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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."

Altria Group

Dividend Yield: 4.60%

Altria Group

(NYSE:

MO

) shares currently have a dividend yield of 4.60%.

Altria Group, Inc., through its subsidiaries, manufactures and sells cigarettes, smokeless products, and wine in the United States and internationally. The company has a P/E ratio of 19.14.

The average volume for Altria Group has been 7,040,400 shares per day over the past 30 days. Altria Group has a market cap of $82.4 billion and is part of the tobacco industry. Shares are up 7.1% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates

Altria Group

as a

TheStreet Recommends

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, growth in earnings per share, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 1.0%. 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 ALTRIA GROUP INC is rather high; currently it is at 57.93%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.60% is above that of the industry average.
  • ALTRIA GROUP INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ALTRIA GROUP INC increased its bottom line by earning $2.26 versus $2.06 in the prior year. This year, the market expects an improvement in earnings ($2.57 versus $2.26).
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Tobacco industry and the overall market, ALTRIA GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.

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

Regal Entertainment Group

Dividend Yield: 4.40%

Regal Entertainment Group

(NYSE:

RGC

) shares currently have a dividend yield of 4.40%.

Regal Entertainment Group, through its subsidiaries, operates as a motion picture exhibitor in the United States. The company develops, acquires, and operates multi-screen theatres primarily in mid-sized metropolitan markets and suburban growth areas of larger metropolitan markets. The company has a P/E ratio of 20.01.

The average volume for Regal Entertainment Group has been 1,014,500 shares per day over the past 30 days. Regal Entertainment Group has a market cap of $2.6 billion and is part of the media industry. Shares are up 2.2% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates

Regal Entertainment Group

as a

buy

. The company's strongest point has been its expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • REGAL ENTERTAINMENT GROUP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, REGAL ENTERTAINMENT GROUP increased its bottom line by earning $1.00 versus $0.93 in the prior year. This year, the market expects an improvement in earnings ($1.06 versus $1.00).
  • RGC, with its decline in revenue, underperformed when compared the industry average of 12.5%. Since the same quarter one year prior, revenues slightly dropped by 8.5%. 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 significantly exceeded that of the Media industry average, but is less than that of the S&P 500. The net income has decreased by 6.4% when compared to the same quarter one year ago, dropping from $36.10 million to $33.80 million.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • The gross profit margin for REGAL ENTERTAINMENT GROUP is rather low; currently it is at 20.65%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.38% trails that of the industry average.

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

UIL Holdings

Dividend Yield: 4.70%

UIL Holdings

(NYSE:

UIL

) shares currently have a dividend yield of 4.70%.

UIL Holdings Corporation, through its subsidiaries, operates in the regulated utility businesses. The company operates in the Electric Distribution, Electric Transmission, and Gas Distribution segments. The company has a P/E ratio of 17.03.

The average volume for UIL Holdings has been 346,900 shares per day over the past 30 days. UIL Holdings has a market cap of $2.1 billion and is part of the utilities industry. Shares are down 7.2% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates

UIL Holdings

as a

buy

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

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Electric Utilities industry average. The net income increased by 7.1% when compared to the same quarter one year prior, going from $51.81 million to $55.47 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 4.2%. 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.
  • UIL HOLDINGS CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, UIL HOLDINGS CORP increased its bottom line by earning $2.18 versus $2.02 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus $2.18).
  • Net operating cash flow has increased to $156.39 million or 18.33% when compared to the same quarter last year. Despite an increase in cash flow, UIL HOLDINGS CORP's average is still marginally south of the industry average growth rate of 18.54%.
  • Even though the current debt-to-equity ratio is 1.25, it is still below the industry average, suggesting that this level of debt is acceptable within the Electric Utilities industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.72 is weak.

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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