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: 9.70%

America First Multifamily Investors

(NASDAQ:

ATAX

) shares currently have a dividend yield of 9.70%.

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 19.92.

The average volume for America First Multifamily Investors has been 107,300 shares per day over the past 30 days. America First Multifamily Investors has a market cap of $312.1 million and is part of the real estate industry. Shares are up 0.2% year-to-date as of the close of trading on Friday.

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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, increase in net income and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • ATAX's very impressive revenue growth greatly exceeded the industry average of 9.0%. Since the same quarter one year prior, revenues leaped by 63.5%. 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 AMERICA FIRST MULTIFAMILY-LP is currently very high, coming in at 86.71%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 48.02% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 50.02% to $6.88 million when compared to the same quarter last year. Despite an increase in cash flow of 50.02%, AMERICA FIRST MULTIFAMILY-LP is still growing at a significantly lower rate than the industry average of 124.68%.
  • 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 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.
  • ATAX has underperformed the S&P 500 Index, declining 14.81% from its price level of one year ago. 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.

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Icahn

Dividend Yield: 8.30%

Icahn

(NASDAQ:

IEP

) shares currently have a dividend yield of 8.30%.

Icahn Enterprises L.P., through its subsidiaries, operates in investment, automotive, energy, metals, railcar, gaming, food packaging, real estate, and home fashion businesses in the United States, Germany, and Internationally. Its Investment segment operates various private investment funds.

The average volume for Icahn has been 100,400 shares per day over the past 30 days. Icahn has a market cap of $9.2 billion and is part of the conglomerates industry. Shares are down 19.7% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

TheStreet Recommends

Icahn

as a

hold

. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including generally higher debt management risk, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 1041.66% to $339.00 million when compared to the same quarter last year. In addition, ICAHN ENTERPRISES LP has also vastly surpassed the industry average cash flow growth rate of 3.45%.
  • IEP, with its decline in revenue, underperformed when compared the industry average of 4.2%. Since the same quarter one year prior, revenues fell by 22.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ICAHN ENTERPRISES LP 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. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ICAHN ENTERPRISES LP swung to a loss, reporting -$2.92 versus $8.98 in the prior year. This year, the market expects an improvement in earnings ($5.80 versus -$2.92).
  • The debt-to-equity ratio is very high at 2.30 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • 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 Industrial Conglomerates industry and the overall market, ICAHN ENTERPRISES LP's return on equity significantly trails that of both the industry average and the S&P 500.

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Alcentra Capital

Dividend Yield: 11.10%

Alcentra Capital

(NASDAQ:

ABDC

) shares currently have a dividend yield of 11.10%.

Alcentra Capital Corporation is a Business Development Company specializing in investments in lower middle-market companies. It invests in the form of subordinated debt and, to a lesser extent, senior debt and minority equity investments. The company has a P/E ratio of 8.36.

The average volume for Alcentra Capital has been 52,100 shares per day over the past 30 days. Alcentra Capital has a market cap of $165.0 million and is part of the financial services industry. Shares are up 2.6% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Alcentra Capital

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 find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:

  • ABDC's revenue growth has slightly outpaced the industry average of 6.9%. Since the same quarter one year prior, revenues rose by 14.9%. 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 fallen to -$9.58 million from having none in the same quarter last year. Since the company had no net operating cash flow for the prior period, we cannot calculate a percent change in order to compare its growth rate with that of its industry average.
  • When compared to other companies in the Capital Markets industry and the overall market, ALCENTRA CAPITAL CORP's return on equity is below that of both the industry average and the S&P 500.
  • ALCENTRA CAPITAL CORP's earnings per share declined by 13.0% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.50 versus $1.35).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Capital Markets industry average. The net income has decreased by 11.8% when compared to the same quarter one year ago, dropping from $7.27 million to $6.41 million.

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