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."

Lamar Advertising

Dividend Yield: 5.00%

Lamar Advertising

(NASDAQ:

LAMR

) shares currently have a dividend yield of 5.00%.

Lamar Advertising Company is a publicly owned equity real estate investment trust. The firm primarily engages in selling advertising space on billboards, buses, shelters, benches, and logo plates. Lamar Advertising Company was founded in 1902 and is headquartered in Baton Rouge, Louisiana. The company has a P/E ratio of 21.88.

The average volume for Lamar Advertising has been 768,800 shares per day over the past 30 days. Lamar Advertising has a market cap of $6.6 billion and is part of the real estate industry. Shares are down 0.1% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Lamar Advertising

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, solid stock price performance, expanding profit margins and notable return on equity. We feel its 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 8.0%. Since the same quarter one year prior, revenues slightly increased by 5.7%. 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 slightly increased to $164.18 million or 9.94% when compared to the same quarter last year. In addition, LAMAR ADVERTISING CO has also modestly surpassed the industry average cash flow growth rate of 0.99%.
  • Compared to where it was trading a year ago, LAMR's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed 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.
  • LAMAR ADVERTISING CO 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. 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, LAMAR ADVERTISING CO increased its bottom line by earning $2.71 versus $2.66 in the prior year. This year, the market expects an improvement in earnings ($3.03 versus $2.71).
  • The gross profit margin for LAMAR ADVERTISING CO is rather high; currently it is at 65.47%. Regardless of LAMR'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 21.49% trails the industry average.

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Aircastle

Dividend Yield: 4.50%

Aircastle

(NYSE:

AYR

) shares currently have a dividend yield of 4.50%.

Aircastle Limited, through its subsidiaries, acquires, leases, and sells commercial jet aircraft to airlines. The company also invests in other aviation assets, including debt investments secured by commercial jet aircraft. The company has a P/E ratio of 14.35.

The average volume for Aircastle has been 641,800 shares per day over the past 30 days. Aircastle has a market cap of $1.7 billion and is part of the diversified services industry. Shares are up 3.9% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Aircastle

as a

buy

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

Highlights from the ratings report include:

  • Net operating cash flow has increased to $117.82 million or 26.94% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -2.09%.
  • The gross profit margin for AIRCASTLE LTD is currently very high, coming in at 92.09%. Regardless of AYR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AYR's net profit margin of 25.16% significantly outperformed against the industry.
  • AIRCASTLE LTD's earnings per share declined by 30.0% 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, AIRCASTLE LTD increased its bottom line by earning $1.50 versus $1.25 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.50).
  • AYR, with its decline in revenue, slightly underperformed the industry average of 4.5%. Since the same quarter one year prior, revenues fell by 13.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 the other companies in the Trading Companies & Distributors industry and the overall market, AIRCASTLE LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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Magellan Midstream Partners

Dividend Yield: 4.40%

Magellan Midstream Partners

(NYSE:

MMP

) shares currently have a dividend yield of 4.40%.

Magellan Midstream Partners, L.P. engages in the transportation, storage, and distribution of refined petroleum products and crude oil in the United States. It operates through Refined Products, Crude Oil, and Marine Storage segments. The company has a P/E ratio of 38.75.

The average volume for Magellan Midstream Partners has been 1,522,800 shares per day over the past 30 days. Magellan Midstream Partners has a market cap of $16.2 billion and is part of the energy industry. Shares are up 5% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Magellan Midstream Partners

as a

buy

. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

  • The gross profit margin for MAGELLAN MIDSTREAM PRTNRS LP is rather high; currently it is at 54.53%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 36.14% significantly outperformed against the industry average.
  • Despite the weak revenue results, MMP has outperformed against the industry average of 34.5%. Since the same quarter one year prior, revenues fell by 14.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 17.8% when compared to the same quarter one year ago, dropping from $252.09 million to $207.12 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MAGELLAN MIDSTREAM PRTNRS LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $345.59 million or 12.28% when compared to the same quarter last year. Despite a decrease in cash flow MAGELLAN MIDSTREAM PRTNRS LP is still fairing well by exceeding its industry average cash flow growth rate of -39.44%.

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