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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."

Abercrombie & Fitch

Dividend Yield: 4.20%

Abercrombie & Fitch

(NYSE:

ANF

) shares currently have a dividend yield of 4.20%.

Abercrombie & Fitch Co., through its subsidiaries, operates as a specialty retailer of apparel for men, women, and kids. The company operates through three segments: U.S. Stores, International Stores, and Direct-to-Consumer. The company has a P/E ratio of 945.50.

The average volume for Abercrombie & Fitch has been 2,787,000 shares per day over the past 30 days. Abercrombie & Fitch has a market cap of $1.3 billion and is part of the retail industry. Shares are down 34.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Abercrombie & Fitch

as a

hold

. At the same time, however, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • ANF, with its decline in revenue, underperformed when compared the industry average of 10.4%. Since the same quarter one year prior, revenues slightly dropped by 8.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ABERCROMBIE & FITCH 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, ABERCROMBIE & FITCH increased its bottom line by earning $0.73 versus $0.70 in the prior year. For the next year, the market is expecting a contraction of 4.1% in earnings ($0.70 versus $0.73).
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 57.82%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 105.88% compared to the year-earlier 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.
  • 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 Specialty Retail industry. The net income has significantly decreased by 106.2% when compared to the same quarter one year ago, falling from $12.88 million to -$0.80 million.

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Intersil Corporation

Dividend Yield: 4.70%

Intersil Corporation

(NASDAQ:

ISIL

) shares currently have a dividend yield of 4.70%.

Intersil Corporation designs and develops power management and precision analog integrated circuits (ICs) for industrial and infrastructure, consumer, and computing markets.

The average volume for Intersil Corporation has been 929,200 shares per day over the past 30 days. Intersil Corporation has a market cap of $1.4 billion and is part of the electronics industry. Shares are down 26.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

TheStreet Recommends

Intersil Corporation

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 largely solid financial position with reasonable debt levels by most measures. 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:

  • INTERSIL CORP 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, INTERSIL CORP increased its bottom line by earning $0.41 versus $0.03 in the prior year. This year, the market expects an improvement in earnings ($0.61 versus $0.41).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 176.4% when compared to the same quarter one year prior, rising from $13.65 million to $37.72 million.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.5%. Since the same quarter one year prior, revenues fell by 10.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ISIL'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 25.78%, 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.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, INTERSIL CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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Frontier Communications

Dividend Yield: 8.70%

Frontier Communications

(NASDAQ:

FTR

) shares currently have a dividend yield of 8.70%.

Frontier Communications Corporation, a communications company, provides regulated and unregulated voice, data, and video services to residential, business, and wholesale customers in the United States.

The average volume for Frontier Communications has been 29,120,800 shares per day over the past 30 days. Frontier Communications has a market cap of $5.7 billion and is part of the telecommunications industry. Shares are down 26.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Frontier Communications

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 5.0%. Since the same quarter one year prior, revenues rose by 19.2%. 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 increased to $367.00 million or 11.80% when compared to the same quarter last year. In addition, FRONTIER COMMUNICATIONS CORP has also modestly surpassed the industry average cash flow growth rate of 2.98%.
  • Despite the current debt-to-equity ratio of 1.58, it is still below the industry average, suggesting that this level of debt is acceptable within the Diversified Telecommunication Services industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.58 is very high and demonstrates very strong liquidity.
  • 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 174.3% when compared to the same quarter one year ago, falling from $37.68 million to -$28.00 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, FRONTIER COMMUNICATIONS CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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