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: 9.90%

TCP Capital

(NASDAQ:

TCPC

) shares currently have a dividend yield of 9.90%.

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 9.39.

The average volume for TCP Capital has been 160,000 shares per day over the past 30 days. TCP Capital has a market cap of $712.8 million and is part of the financial services industry. Shares are down 10.6% year-to-date as of the close of trading on Tuesday.

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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, increase in net income, good cash flow from operations and expanding profit margins. 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 3.9%. 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 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 2.2% when compared to the same quarter one year prior, going from $18.45 million to $18.86 million.
  • Net operating cash flow has increased to -$37.51 million or 14.12% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 1.80%.
  • 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.
  • 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).

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Global Partners

Dividend Yield: 8.20%

Global Partners

(NYSE:

GLP

) shares currently have a dividend yield of 8.20%.

Global Partners LP, a midstream logistics and marketing company, distributes gasoline, distillates, residual oil, and renewable fuels to wholesalers, retailers, and commercial customers in the New England states and New York. The company has a P/E ratio of 11.91.

The average volume for Global Partners has been 167,100 shares per day over the past 30 days. Global Partners has a market cap of $1.0 billion and is part of the wholesale industry. Shares are up 2.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Global Partners

as a

buy

. Among the primary strengths of the company is its attractive valuation levels, considering its current price compared to earnings, book value and other 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:

  • GLP, with its decline in revenue, slightly underperformed the industry average of 38.8%. Since the same quarter one year prior, revenues fell by 41.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • GLOBAL PARTNERS LP 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, GLOBAL PARTNERS LP increased its bottom line by earning $3.96 versus $1.43 in the prior year. For the next year, the market is expecting a contraction of 50.5% in earnings ($1.96 versus $3.96).
  • The gross profit margin for GLOBAL PARTNERS LP is currently extremely low, coming in at 6.43%. Regardless of GLP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.02% trails the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 25.44%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 54.67% compared to the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.

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Gladstone Capital

Dividend Yield: 11.00%

Gladstone Capital

(NASDAQ:

GLAD

) shares currently have a dividend yield of 11.00%.

Gladstone Capital Corporation is a business development company specializing in investments in debt and equity securities. The company has a P/E ratio of 14.43.

The average volume for Gladstone Capital has been 77,400 shares per day over the past 30 days. Gladstone Capital has a market cap of $161.7 million and is part of the financial services industry. Shares are down 6.4% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Gladstone Capital

as a

buy

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

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 553.9% when compared to the same quarter one year prior, rising from -$2.10 million to $9.54 million.
  • The gross profit margin for GLADSTONE CAPITAL CORP is rather high; currently it is at 65.58%. Regardless of GLAD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GLAD's net profit margin of 103.45% significantly outperformed against the industry.
  • GLADSTONE CAPITAL CORP reported significant earnings per share improvement 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, GLADSTONE CAPITAL CORP reported lower earnings of $0.53 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($0.81 versus $0.53).
  • GLAD, with its decline in revenue, slightly underperformed the industry average of 3.9%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • GLAD has underperformed the S&P 500 Index, declining 19.90% from its price level of one year ago. 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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