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."

Monroe Capital

Dividend Yield: 9.50%

Monroe Capital

(NASDAQ:

MRCC

) shares currently have a dividend yield of 9.50%.

Monroe Capital Corporation is a business development company specializing in senior, unitranche and junior secured debt and, to a lesser extent, unsecured debt and equity investments in middle-market companies. The fund focuses on companies with a maximum of $25 million in EBITDA per year. The company has a P/E ratio of 11.98.

The average volume for Monroe Capital has been 59,200 shares per day over the past 30 days. Monroe Capital has a market cap of $191.6 million and is part of the real estate industry. Shares are up 13.2% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates

Monroe Capital

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 24.5%. Since the same quarter one year prior, revenues rose by 16.6%. 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 net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income increased by 0.2% when compared to the same quarter one year prior, going from $4.20 million to $4.21 million.
  • The gross profit margin for MONROE CAPITAL CORP is rather high; currently it is at 65.35%. Regardless of MRCC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MRCC's net profit margin of 41.59% significantly outperformed against the industry.
  • MONROE CAPITAL CORP's earnings per share declined by 25.0% 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, MONROE CAPITAL CORP increased its bottom line by earning $1.55 versus $1.45 in the prior year. This year, the market expects an improvement in earnings ($1.67 versus $1.55).
  • After a year of stock price fluctuations, the net result is that MRCC's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Harvest Capital Credit

Dividend Yield: 10.30%

Harvest Capital Credit

(NASDAQ:

HCAP

) shares currently have a dividend yield of 10.30%.

Harvest Capital Credit LLC is a business development company providing structured credit to small businesses. The company has a P/E ratio of 8.52.

The average volume for Harvest Capital Credit has been 30,000 shares per day over the past 30 days. Harvest Capital Credit has a market cap of $82.5 million and is part of the financial services industry. Shares are up 10.7% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates

Harvest Capital Credit

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 somewhat disappointing return on equity.

Highlights from the ratings report include:

  • HCAP's very impressive revenue growth greatly exceeded the industry average of 24.5%. Since the same quarter one year prior, revenues leaped by 55.0%. 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 HARVEST CAPITAL CREDIT CORP is rather high; currently it is at 66.95%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 31.86% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 113.06% to $2.06 million when compared to the same quarter last year. In addition, HARVEST CAPITAL CREDIT CORP has also vastly surpassed the industry average cash flow growth rate of -198.91%.
  • HARVEST CAPITAL CREDIT CORP's earnings per share declined by 22.7% 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, HARVEST CAPITAL CREDIT CORP reported lower earnings of $1.04 versus $1.52 in the prior year. This year, the market expects an improvement in earnings ($1.46 versus $1.04).
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Capital Markets industry average, but is less than that of the S&P 500. The net income has decreased by 23.6% when compared to the same quarter one year ago, dropping from $2.74 million to $2.10 million.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

New Mountain Finance

Dividend Yield: 10.80%

New Mountain Finance

(NYSE:

NMFC

) shares currently have a dividend yield of 10.80%.

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 8.76.

The average volume for New Mountain Finance has been 248,100 shares per day over the past 30 days. New Mountain Finance has a market cap of $806.2 million and is part of the financial services industry. Shares are down 3.5% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates

New Mountain Finance

as a

buy

. The company's strengths can be seen in multiple areas, such as its 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 greatly exceeded the industry average of 24.5%. Since the same quarter one year prior, revenues rose by 12.2%. 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.
  • The gross profit margin for NEW MOUNTAIN FINANCE CORP is rather high; currently it is at 68.85%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.64% is above that of the industry average.
  • Net operating cash flow has significantly increased by 69.43% to $41.12 million when compared to the same quarter last year. In addition, NEW MOUNTAIN FINANCE CORP has also vastly surpassed the industry average cash flow growth rate of -198.91%.
  • NEW MOUNTAIN FINANCE CORP 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 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 $0.56 versus $0.87 in the prior year. This year, the market expects an improvement in earnings ($1.37 versus $0.56).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Capital Markets industry. The net income has significantly decreased by 64.9% when compared to the same quarter one year ago, falling from $22.91 million to $8.05 million.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Other helpful dividend tools from TheStreet: