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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."

American Midstream Partners

Dividend Yield: 19.10%

American Midstream Partners

(NYSE:

AMID

) shares currently have a dividend yield of 19.10%.

American Midstream Partners, LP engages in gathering, treating, processing, and transporting natural gas, fractionating natural gas liquids (NGLs), and storing specialty chemical products in the Gulf Coast and Southeast regions of the United States.

The average volume for American Midstream Partners has been 54,000 shares per day over the past 30 days. American Midstream Partners has a market cap of $225.5 million and is part of the energy industry. Shares are down 49.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

American Midstream Partners

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TheStreet Recommends

as a

hold

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

Highlights from the ratings report include:

  • AMERICAN MIDSTREAM PRTNRS LP has improved earnings per share by 47.2% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, AMERICAN MIDSTREAM PRTNRS LP continued to lose money by earning -$6.47 versus -$6.63 in the prior year. This year, the market expects an improvement in earnings ($0.55 versus -$6.47).
  • 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 106.5% when compared to the same quarter one year prior, rising from $0.40 million to $0.83 million.
  • Despite the weak revenue results, AMID has outperformed against the industry average of 37.8%. Since the same quarter one year prior, revenues fell by 19.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • AMID's debt-to-equity ratio of 0.88 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.16 is very low and demonstrates very weak liquidity.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, AMERICAN MIDSTREAM PRTNRS LP's return on equity significantly trails that of both the industry average and the S&P 500.

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Arbor Realty

Dividend Yield: 9.00%

Arbor Realty

(NYSE:

ABR

) shares currently have a dividend yield of 9.00%.

Arbor Realty Trust, Inc., a specialized real estate finance company, invests in various structured finance investments. The company has a P/E ratio of 3.61.

The average volume for Arbor Realty has been 283,600 shares per day over the past 30 days. Arbor Realty has a market cap of $339.9 million and is part of the real estate industry. Shares are down 3.5% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Arbor Realty

as a

hold

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

Highlights from the ratings report include:

  • ABR's revenue growth has slightly outpaced the industry average of 6.6%. Since the same quarter one year prior, revenues rose by 10.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ARBOR REALTY TRUST INC's return on equity exceeds that of both the industry average and the S&P 500.
  • ARBOR REALTY TRUST INC 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ARBOR REALTY TRUST INC increased its bottom line by earning $1.71 versus $0.41 in the prior year. For the next year, the market is expecting a contraction of 54.4% in earnings ($0.78 versus $1.71).
  • In its most recent trading session, ABR 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. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has significantly decreased to $2.27 million or 50.31% when compared to the same quarter last year. Despite a decrease in cash flow ARBOR REALTY TRUST INC is still fairing well by exceeding its industry average cash flow growth rate of -70.48%.

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Apollo Investment

Dividend Yield: 11.70%

Apollo Investment

(NASDAQ:

AINV

) shares currently have a dividend yield of 11.70%.

Apollo Investment Corporation is business development company and operates as a closed-end management investment company. The company invests in middle market companies. It provides direct equity capital, mezzanine and senior secured loans, and subordinated debt and loans. The company has a P/E ratio of 21.38.

The average volume for Apollo Investment has been 1,324,400 shares per day over the past 30 days. Apollo Investment has a market cap of $1.6 billion and is part of the financial services industry. Shares are down 7.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Apollo Investment

as a

hold

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

Highlights from the ratings report include:

  • AINV's revenue growth has slightly outpaced the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 5.9%. 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.
  • Net operating cash flow has significantly increased by 166.66% to $113.51 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 135.40%.
  • The gross profit margin for APOLLO INVESTMENT CORP is currently very high, coming in at 71.72%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -11.48% is in-line with the industry average.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Capital Markets industry and the overall market, APOLLO INVESTMENT CORP's return on equity is below that of both the industry average and the S&P 500.
  • The share price of APOLLO INVESTMENT CORP has not done very well: it is down 21.52% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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