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."

Alon USA Partners

Dividend Yield: 16.50%

Alon USA Partners

(NYSE:

ALDW

) shares currently have a dividend yield of 16.50%.

Alon USA Partners, LP refines and markets petroleum products primarily in the South Central and Southwestern regions of the United States. The company owns and operates a crude oil refinery in Big Spring, Texas with crude oil throughput capacity of 73,000 barrels per day. The company has a P/E ratio of 7.32.

The average volume for Alon USA Partners has been 230,600 shares per day over the past 30 days. Alon USA Partners has a market cap of $1.6 billion and is part of the energy industry. Shares are up 81.1% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Alon USA Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 691.66% and other important driving factors, this stock has surged by 46.91% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • ALON USA 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, ALON USA PARTNERS LP increased its bottom line by earning $2.70 versus $2.19 in the prior year. This year, the market expects an improvement in earnings ($2.95 versus $2.70).
  • Despite the weak revenue results, ALDW has outperformed against the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 13.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for ALON USA PARTNERS LP is currently extremely low, coming in at 14.98%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, ALDW's net profit margin of 9.50% compares favorably to the industry average.
  • The debt-to-equity ratio of 1.43 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, ALDW maintains a poor quick ratio of 0.83, which illustrates the inability to avoid short-term cash problems.

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Golar LNG Partners

Dividend Yield: 14.20%

Golar LNG Partners

(NASDAQ:

GMLP

) shares currently have a dividend yield of 14.20%.

Golar LNG Partners LP owns and operates floating storage regasification units (FSRUs) and liquefied natural gas (LNG) carriers in Brazil, the United Arab Emirates, Indonesia, and Kuwait. As of April 29, 2015, it had a fleet of six FSRUs and four LNG carriers. The company has a P/E ratio of 7.02.

The average volume for Golar LNG Partners has been 250,500 shares per day over the past 30 days. Golar LNG Partners has a market cap of $740.7 million and is part of the transportation industry. Shares are down 51% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Golar LNG Partners

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 34.6%. Since the same quarter one year prior, revenues slightly increased by 4.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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 Oil, Gas & Consumable Fuels industry and the overall market, GOLAR LNG PARTNERS LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for GOLAR LNG PARTNERS LP is currently very high, coming in at 81.67%. Regardless of GMLP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GMLP's net profit margin of 38.81% significantly outperformed against the industry.
  • Net operating cash flow has decreased to $45.56 million or 12.60% when compared to the same quarter last year. Despite a decrease in cash flow of 12.60%, GOLAR LNG PARTNERS LP is in line with the industry average cash flow growth rate of -19.71%.
  • The debt-to-equity ratio is very high at 2.92 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.

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Horizon Technology Finance

Dividend Yield: 14.30%

Horizon Technology Finance

(NASDAQ:

HRZN

) shares currently have a dividend yield of 14.30%.

Horizon Technology Finance Corporation, a specialty finance company, lends to and invests in development-stage companies in the United States. The company has a P/E ratio of 11.88.

The average volume for Horizon Technology Finance has been 81,900 shares per day over the past 30 days. Horizon Technology Finance has a market cap of $112.0 million and is part of the financial services industry. Shares are down 34.5% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Horizon Technology Finance

as a

hold

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

Highlights from the ratings report include:

  • The gross profit margin for HORIZON TECHNOLOGY FINANCE is rather high; currently it is at 60.54%. Regardless of HRZN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HRZN's net profit margin of 25.44% significantly outperformed against the industry.
  • HRZN, with its decline in revenue, underperformed when compared the industry average of 6.7%. Since the same quarter one year prior, revenues fell by 21.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing 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. When compared to other companies in the Capital Markets industry and the overall market, HORIZON TECHNOLOGY FINANCE's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$34.05 million or 558.74% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Capital Markets industry average. The net income has significantly decreased by 28.3% when compared to the same quarter one year ago, falling from $2.44 million to $1.75 million.

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