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."

America First Multifamily Investors

Dividend Yield: 9.20%

America First Multifamily Investors

(NASDAQ:

ATAX

) shares currently have a dividend yield of 9.20%.

America First Multifamily Investors, L.P. acquires, holds, sells, and deals in a portfolio of mortgage revenue bonds that have been issued to provide construction and/or permanent financing for multifamily and student housing, and commercial properties. The company has a P/E ratio of 23.61.

The average volume for America First Multifamily Investors has been 101,700 shares per day over the past 30 days. America First Multifamily Investors has a market cap of $327.2 million and is part of the real estate industry. Shares are up 1.1% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

America First Multifamily Investors

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 15.3%. Since the same quarter one year prior, revenues rose by 27.5%. 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.
  • The gross profit margin for AMERICA FIRST MULTIFAMILY-LP is currently very high, coming in at 79.17%. Regardless of ATAX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ATAX's net profit margin of 18.03% is significantly lower than the industry average.
  • After a year of stock price fluctuations, the net result is that ATAX's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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.
  • 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 greatly underperformed compared to the Thrifts & Mortgage Finance industry average. The net income has decreased by 23.2% when compared to the same quarter one year ago, dropping from $3.31 million to $2.54 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. When compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, AMERICA FIRST MULTIFAMILY-LP's return on equity is below that of both the industry average and the S&P 500.

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Arc Logistics Partners

Dividend Yield: 12.90%

Arc Logistics Partners

(NYSE:

ARCX

) shares currently have a dividend yield of 12.90%.

Arc Logistics Partners LP engages in the terminalling, storage, throughput, and transloading of crude oil and petroleum products.

The average volume for Arc Logistics Partners has been 12,600 shares per day over the past 30 days. Arc Logistics Partners has a market cap of $179.3 million and is part of the energy industry. Shares are down 19% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Arc Logistics Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and expanding profit margins. 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:

  • ARCX's very impressive revenue growth greatly exceeded the industry average of 36.7%. Since the same quarter one year prior, revenues leaped by 75.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for ARC LOGISTICS PARTNERS LP is rather high; currently it is at 67.75%. It has increased significantly from the same period last year. Along with this, the net profit margin of 8.30% is above that of the industry average.
  • ARC LOGISTICS PARTNERS LP has improved earnings per share by 9.1% in the most recent quarter compared to the same quarter a year ago. 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, ARC LOGISTICS PARTNERS LP reported lower earnings of $0.06 versus $0.13 in the prior year. This year, the market expects an improvement in earnings ($0.43 versus $0.06).
  • ARCX'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 37.71%, 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 Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, ARC LOGISTICS PARTNERS LP underperformed against that of the industry average and is significantly less than that of the S&P 500.

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Ferrellgas Partners

Dividend Yield: 9.90%

Ferrellgas Partners

(NYSE:

FGP

) shares currently have a dividend yield of 9.90%.

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 company has a P/E ratio of 59.43.

The average volume for Ferrellgas Partners has been 257,300 shares per day over the past 30 days. Ferrellgas Partners has a market cap of $2.1 billion and is part of the energy industry. Shares are down 8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Ferrellgas Partners

as a

hold

. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, 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:

  • Compared to other companies in the Gas Utilities industry and the overall market, FERRELLGAS PARTNERS -LP's return on equity exceeds that of both the industry average and the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.1%. Since the same quarter one year prior, revenues slightly dropped by 4.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Gas Utilities industry average, but is less than that of the S&P 500. The net income has decreased by 23.0% when compared to the same quarter one year ago, dropping from -$47.80 million to -$58.78 million.
  • Looking at the price performance of FGP's shares over the past 12 months, there is not much good news to report: the stock is down 27.69%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, FGP is still more expensive than most of the other companies in its industry.
  • The debt-to-equity ratio is very high at 9.59 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 0.50, which clearly demonstrates the inability to cover short-term cash needs.

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