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."

Brandywine Realty

Dividend Yield: 4.70%

Brandywine Realty

(NYSE:

BDN

) shares currently have a dividend yield of 4.70%.

Brandywine Realty Trust is a publically owned real estate investment trust. The firm invests in real estate markets of the United States. It makes investments in office, mixed-use, and industrial properties. The company has a P/E ratio of 98.69.

The average volume for Brandywine Realty has been 1,785,100 shares per day over the past 30 days. Brandywine Realty has a market cap of $2.2 billion and is part of the real estate industry. Shares are down 6.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Brandywine Realty

as a

hold

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

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 129.6% when compared to the same quarter one year prior, rising from $8.77 million to $20.15 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.3%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • BRANDYWINE REALTY TRUST reported significant earnings per share improvement 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, BRANDYWINE REALTY TRUST swung to a loss, reporting -$0.01 versus $0.20 in the prior year. This year, the market expects an improvement in earnings ($0.18 versus -$0.01).
  • The gross profit margin for BRANDYWINE REALTY TRUST is rather low; currently it is at 22.88%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 13.28% significantly trails the industry average.
  • BDN'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 25.26%, 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. 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, BDN is still more expensive than most of the other companies in its industry.

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Lexmark International

Dividend Yield: 5.10%

Lexmark International

(NYSE:

LXK

) shares currently have a dividend yield of 5.10%.

Lexmark International, Inc., together with its subsidiaries, operates as a developer, manufacturer, and supplier of printing, imaging, device management, managed print services (MPS), document workflow, and business process and content management solutions worldwide.

The average volume for Lexmark International has been 646,700 shares per day over the past 30 days. Lexmark International has a market cap of $1.7 billion and is part of the computer hardware industry. Shares are down 13.9% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Lexmark International

as a

hold

. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • 45.78% is the gross profit margin for LEXMARK INTL INC which we consider to be strong. 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 -1.75% is in-line with the industry average.
  • LXK, with its decline in revenue, slightly underperformed the industry average of 2.5%. Since the same quarter one year prior, revenues slightly dropped by 5.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • LEXMARK INTL INC 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 two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, LEXMARK INTL INC reported lower earnings of $1.20 versus $4.10 in the prior year. This year, the market expects an improvement in earnings ($3.46 versus $1.20).
  • 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 Computers & Peripherals industry and the overall market, LEXMARK INTL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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 Computers & Peripherals industry. The net income has significantly decreased by 143.8% when compared to the same quarter one year ago, falling from $34.70 million to -$15.20 million.

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Computer Programs and Systems

Dividend Yield: 4.90%

Computer Programs and Systems

(NASDAQ:

CPSI

) shares currently have a dividend yield of 4.90%.

Computer Programs and Systems, Inc. provides healthcare information technology solutions for rural and community hospitals in the United States. The company's integrated enterprise-wide system automates clinical and financial data management in the functional areas of a hospital. The company has a P/E ratio of 32.43.

The average volume for Computer Programs and Systems has been 142,100 shares per day over the past 30 days. Computer Programs and Systems has a market cap of $593.7 million and is part of the computer software & services industry. Shares are up 13.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Computer Programs and Systems

as a

hold

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

Highlights from the ratings report include:

  • CPSI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.96, which clearly demonstrates the ability to cover short-term cash needs.
  • 39.60% is the gross profit margin for COMPUTER PROGRAMS & SYSTEMS which we consider to be strong. Regardless of CPSI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.67% trails the industry average.
  • The revenue fell significantly faster than the industry average of 28.3%. Since the same quarter one year prior, revenues slightly dropped by 4.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Health Care Technology industry. The net income has significantly decreased by 49.7% when compared to the same quarter one year ago, falling from $6.74 million to $3.39 million.
  • Net operating cash flow has significantly decreased to $4.55 million or 64.66% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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