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."

Consolidated Communications

Dividend Yield: 8.00%

Consolidated Communications

(NASDAQ:

CNSL

) shares currently have a dividend yield of 8.00%.

Consolidated Communications Holdings, Inc., through its subsidiaries, provides various integrated communications services to residential and business clients.

The average volume for Consolidated Communications has been 189,500 shares per day over the past 30 days. Consolidated Communications has a market cap of $977.9 million and is part of the telecommunications industry. Shares are down 8.8% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Consolidated Communications

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 10.4%. Since the same quarter one year prior, revenues rose by 30.1%. 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 55.05% to $71.82 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 16.26%.
  • The gross profit margin for CONSOLIDATED COMM HLDGS INC is rather high; currently it is at 57.10%. Regardless of CNSL'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 1.33% trails the industry average.
  • The debt-to-equity ratio is very high at 5.34 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, CNSL maintains a poor quick ratio of 0.80, which illustrates the inability to avoid short-term cash problems.
  • 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 Diversified Telecommunication Services industry and the overall market, CONSOLIDATED COMM HLDGS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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Cheniere Energy Partners

Dividend Yield: 7.20%

Cheniere Energy Partners

(AMEX:

CQP

) shares currently have a dividend yield of 7.20%.

Cheniere Energy Partners, L.P., through its subsidiary, Sabine Pass LNG, L.P., owns and operates the Sabine Pass liquefied natural gas (LNG) terminal located on the Sabine Pass deep water shipping channel.

The average volume for Cheniere Energy Partners has been 303,200 shares per day over the past 30 days. Cheniere Energy Partners has a market cap of $1.3 billion and is part of the energy industry. Shares are down 10.6% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Cheniere Energy Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, good cash flow from operations and expanding profit margins. 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:

  • 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 44.2% when compared to the same quarter one year prior, rising from -$43.24 million to -$24.13 million.
  • Net operating cash flow has significantly increased by 88.06% to -$3.53 million when compared to the same quarter last year. In addition, CHENIERE ENERGY PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -26.82%.
  • CHENIERE ENERGY PARTNERS LP has improved earnings per share by 46.1% 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, CHENIERE ENERGY PARTNERS LP reported poor results of -$1.22 versus -$0.89 in the prior year. This year, the market expects an improvement in earnings (-$0.37 versus -$1.22).
  • CQP has underperformed the S&P 500 Index, declining 22.50% 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.
  • 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CHENIERE ENERGY PARTNERS 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: 13.00%

Alcentra Capital

(NASDAQ:

ABDC

) shares currently have a dividend yield of 13.00%.

Alcentra Capital Corporation is a business development company specializing in investments in lower middle-market companies. The company has a P/E ratio of 6.99.

The average volume for Alcentra Capital has been 38,500 shares per day over the past 30 days. Alcentra Capital has a market cap of $141.9 million and is part of the financial services industry. Shares are down 12.1% 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 robust revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 5.6%. Since the same quarter one year prior, revenues rose by 45.1%. 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 ALCENTRA CAPITAL CORP is currently very high, coming in at 77.23%. It has increased significantly from the same period last year. Along with this, the net profit margin of 38.25% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 77.69% to -$1.59 million when compared to the same quarter last year. Despite an increase in cash flow of 77.69%, ALCENTRA CAPITAL CORP is still growing at a significantly lower rate than the industry average of 276.16%.
  • The share price of ALCENTRA CAPITAL CORP has not done very well: it is down 18.74% 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. 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 significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 58.8% when compared to the same quarter one year ago, falling from $7.90 million to $3.25 million.

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