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

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."

TCP Capital

Dividend Yield: 9.20%

TCP Capital

(NASDAQ:

TCPC

) shares currently have a dividend yield of 9.20%.

TCP Capital Corp. is a business development company specializing in direct equity and debt investments in middle-market, senior secured loans, junior loans, originated loans, mezzanine, senior debt instruments, bonds, and secondary-market investments. It seeks to invest in the United States. The company has a P/E ratio of 10.12.

The average volume for TCP Capital has been 160,600 shares per day over the past 30 days. TCP Capital has a market cap of $768.2 million and is part of the financial services industry. Shares are down 7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

TCP Capital

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, good cash flow from operations and increase in net income. 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 5.9%. Since the same quarter one year prior, revenues rose by 44.8%. 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 TCP CAPITAL CORP is currently very high, coming in at 81.43%. Regardless of TCPC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TCPC's net profit margin of 57.45% significantly outperformed against the industry.
  • Net operating cash flow has increased to -$37.51 million or 14.12% when compared to the same quarter last year. Despite an increase in cash flow of 14.12%, TCP CAPITAL CORP is still growing at a significantly lower rate than the industry average of 188.71%.
  • TCP CAPITAL CORP's earnings per share declined by 24.0% 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 two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, TCP CAPITAL CORP reported lower earnings of $0.96 versus $1.94 in the prior year. This year, the market expects an improvement in earnings ($1.56 versus $0.96).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Capital Markets industry average, but is greater than that of the S&P 500. The net income increased by 2.2% when compared to the same quarter one year prior, going from $18.45 million to $18.86 million.

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BlackRock Capital Investment

Dividend Yield: 9.20%

BlackRock Capital Investment

(NASDAQ:

BKCC

) shares currently have a dividend yield of 9.20%.

BlackRock Capital Investment Corporation, formerly known as BlackRock Kelso Capital Corporation, is a Business Development Company specializing in investments in middle market companies. The fund invests in all industries. The company has a P/E ratio of 6.38.

The average volume for BlackRock Capital Investment has been 347,000 shares per day over the past 30 days. BlackRock Capital Investment has a market cap of $682.0 million and is part of the financial services industry. Shares are up 11.6% year-to-date as of the close of trading on Wednesday.

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TheStreet Recommends

TheStreet Ratings rates

BlackRock Capital Investment

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and expanding profit margins. 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 5.9%. Since the same quarter one year prior, revenues slightly increased by 4.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Capital Markets industry and the overall market, BLACKROCK CAPITAL INVT CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for BLACKROCK CAPITAL INVT CORP is rather high; currently it is at 67.90%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 73.27% significantly outperformed against the industry average.
  • BLACKROCK CAPITAL INVT CORP reported flat earnings per share in the most recent quarter. 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, BLACKROCK CAPITAL INVT CORP increased its bottom line by earning $1.70 versus $1.20 in the prior year. For the next year, the market is expecting a contraction of 48.2% in earnings ($0.88 versus $1.70).
  • In its most recent trading session, BKCC 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.

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AmeriGas Partners

Dividend Yield: 7.80%

AmeriGas Partners

(NYSE:

APU

) shares currently have a dividend yield of 7.80%.

AmeriGas Partners, L.P. operates as a retail and wholesale distributor of propane gas, and related equipment and supplies in the United States. The company has a P/E ratio of 20.24.

The average volume for AmeriGas Partners has been 152,800 shares per day over the past 30 days. AmeriGas Partners has a market cap of $4.4 billion and is part of the utilities industry. Shares are down 1.1% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

AmeriGas Partners

as a

buy

. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, expanding profit margins, good cash flow from operations and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • AMERIGAS PARTNERS -LP has improved earnings per share by 26.9% 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. We feel that this trend should continue. During the past fiscal year, AMERIGAS PARTNERS -LP increased its bottom line by earning $1.80 versus $1.43 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.80).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Gas Utilities industry. The net income increased by 35.8% when compared to the same quarter one year prior, rising from $240.10 million to $326.06 million.
  • The gross profit margin for AMERIGAS PARTNERS -LP is rather high; currently it is at 60.76%. It has increased significantly from the same period last year. Along with this, the net profit margin of 29.63% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 134.35% to $309.39 million when compared to the same quarter last year. In addition, AMERIGAS PARTNERS -LP has also vastly surpassed the industry average cash flow growth rate of 25.00%.
  • APU, with its decline in revenue, slightly underperformed the industry average of 20.2%. Since the same quarter one year prior, revenues fell by 26.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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