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 "Hold."

Arlington Asset Investment

Dividend Yield: 19.80%

Arlington Asset Investment

(NYSE:

AI

) shares currently have a dividend yield of 19.80%.

Arlington Asset Investment Corp., an investment firm, acquires mortgage-related and other assets. The company has a P/E ratio of 4.17.

The average volume for Arlington Asset Investment has been 348,700 shares per day over the past 30 days. Arlington Asset Investment has a market cap of $289.5 million and is part of the real estate industry. Shares are up 0.5% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Arlington Asset Investment

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • AI's very impressive revenue growth greatly exceeded the industry average of 4.5%. Since the same quarter one year prior, revenues leaped by 1148.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for ARLINGTON ASSET INVESTMENT is currently very high, coming in at 88.43%. It has increased significantly from the same period last year. Along with this, the net profit margin of 57.54% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $29.79 million or 32.79% when compared to the same quarter last year. Despite an increase in cash flow of 32.79%, ARLINGTON ASSET INVESTMENT is still growing at a significantly lower rate than the industry average of 139.02%.
  • AI's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 48.28%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Capital Markets industry and the overall market, ARLINGTON ASSET INVESTMENT's return on equity significantly trails that of both the industry average and the S&P 500.

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CrossAmerica Partners

Dividend Yield: 9.80%

CrossAmerica Partners

(NYSE:

CAPL

) shares currently have a dividend yield of 9.80%.

CrossAmerica Partners LP engages in the wholesale distribution of motor fuels, and ownership and leasing of real estate used in the retail distribution of motor fuels in the United States. It distributes gasoline and diesel fuel to approximately 1,100 sites located in 25 states. The company has a P/E ratio of 68.97.

The average volume for CrossAmerica Partners has been 116,600 shares per day over the past 30 days. CrossAmerica Partners has a market cap of $799.3 million and is part of the energy industry. Shares are down 8.8% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

CrossAmerica Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:

  • CROSSAMERICA PARTNERS LP reported significant earnings per share improvement 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CROSSAMERICA PARTNERS LP turned its bottom line around by earning $0.26 versus -$0.22 in the prior year. This year, the market expects an improvement in earnings ($0.62 versus $0.26).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 130.9% when compared to the same quarter one year prior, rising from -$13.64 million to $4.21 million.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, CROSSAMERICA PARTNERS LP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • CAPL's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 28.48%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • Currently the debt-to-equity ratio of 1.63 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.33, which clearly demonstrates the inability to cover short-term cash needs.

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Ferrellgas Partners

Dividend Yield: 12.80%

Ferrellgas Partners

(NYSE:

FGP

) shares currently have a dividend yield of 12.80%.

Ferrellgas Partners, L.P. distributes and sells propane and related equipment and supplies primarily in the United States. The company transports propane to propane distribution locations, tanks on customers' premises, or to portable propane tanks delivered to retailers.

The average volume for Ferrellgas Partners has been 411,600 shares per day over the past 30 days. Ferrellgas Partners has a market cap of $1.6 billion and is part of the energy industry. Shares are down 2.3% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Ferrellgas Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 24.2%. Since the same quarter one year prior, revenues slightly increased by 6.3%. 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.
  • Compared to other companies in the Gas Utilities industry and the overall market, FERRELLGAS PARTNERS -LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Gas Utilities industry. The net income has significantly decreased by 142.7% when compared to the same quarter one year ago, falling from -$32.88 million to -$79.79 million.
  • The debt-to-equity ratio is very high at 21.19 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.44, which clearly demonstrates the inability to cover short-term cash needs.

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