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."

Verizon Communications

Dividend Yield: 4.90%

Verizon Communications

(NYSE:

VZ

) shares currently have a dividend yield of 4.90%.

Verizon Communications Inc., through its subsidiaries, provides communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide. The company has a P/E ratio of 19.46.

The average volume for Verizon Communications has been 15,166,500 shares per day over the past 30 days. Verizon Communications has a market cap of $184.4 billion and is part of the telecommunications industry. Shares are down 2.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Verizon Communications

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, expanding profit margins and growth in earnings per share. 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:

  • VZ's revenue growth has slightly outpaced the industry average of 4.9%. Since the same quarter one year prior, revenues slightly increased by 2.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Diversified Telecommunication Services industry average. The net income increased by 0.4% when compared to the same quarter one year prior, going from $4,214.00 million to $4,231.00 million.
  • Net operating cash flow has increased to $8,737.00 million or 13.98% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.45%.
  • The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 61.37%. Regardless of VZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VZ's net profit margin of 13.12% compares favorably to the industry average.
  • VERIZON COMMUNICATIONS INC's earnings per share improvement from the most recent quarter was slightly positive. 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, VERIZON COMMUNICATIONS INC reported lower earnings of $2.51 versus $4.00 in the prior year. This year, the market expects an improvement in earnings ($3.96 versus $2.51).

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Six Flags Entertainment

Dividend Yield: 4.70%

Six Flags Entertainment

(NYSE:

SIX

) shares currently have a dividend yield of 4.70%.

Six Flags Entertainment Corporation owns and operates regional theme and water parks. Its parks offer various thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues, and retail outlets. The company has a P/E ratio of 67.21.

The average volume for Six Flags Entertainment has been 735,500 shares per day over the past 30 days. Six Flags Entertainment has a market cap of $4.2 billion and is part of the leisure industry. Shares are up 3.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Six Flags Entertainment

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, expanding profit margins and solid stock price performance. 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:

  • SIX's revenue growth has slightly outpaced the industry average of 4.0%. Since the same quarter one year prior, revenues slightly increased by 2.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant 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. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, SIX FLAGS ENTERTAINMENT CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $197.38 million or 11.38% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.79%.
  • The gross profit margin for SIX FLAGS ENTERTAINMENT CORP is rather high; currently it is at 56.76%. Regardless of SIX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SIX's net profit margin of 16.97% compares favorably to the industry average.
  • SIX FLAGS ENTERTAINMENT CORP reported flat earnings per share in the most recent quarter. 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, SIX FLAGS ENTERTAINMENT CORP reported lower earnings of $0.73 versus $1.20 in the prior year. This year, the market expects an improvement in earnings ($1.59 versus $0.73).

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National Health Investors

Dividend Yield: 6.20%

National Health Investors

(NYSE:

NHI

) shares currently have a dividend yield of 6.20%.

National Health Investors Inc. is a real estate investment trust. It invests in the real estate markets of United States. The firm invests in the health care properties primarily in the long-term care and senior housing industries. The company has a P/E ratio of 17.25.

The average volume for National Health Investors has been 234,300 shares per day over the past 30 days. National Health Investors has a market cap of $2.1 billion and is part of the real estate industry. Shares are down 21.5% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

National Health Investors

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, good cash flow from operations, expanding profit margins and increase in net income. 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 came in higher than the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 26.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • NATIONAL HEALTH INVESTORS has improved earnings per share by 9.2% 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, NATIONAL HEALTH INVESTORS increased its bottom line by earning $3.03 versus $2.76 in the prior year. This year, the market expects an improvement in earnings ($3.34 versus $3.03).
  • Net operating cash flow has increased to $41.43 million or 26.53% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 15.97%.
  • The gross profit margin for NATIONAL HEALTH INVESTORS is currently very high, coming in at 71.99%. Regardless of NHI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NHI's net profit margin of 55.65% significantly outperformed against the industry.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Real Estate Investment Trusts (REITs) industry average, but is greater than that of the S&P 500. The net income increased by 23.3% when compared to the same quarter one year prior, going from $25.30 million to $31.18 million.

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