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."

Cypress Semiconductor

Dividend Yield: 4.80%

Cypress Semiconductor

(NASDAQ:

CY

) shares currently have a dividend yield of 4.80%.

Cypress Semiconductor Corporation provides mixed-signal programmable solutions, semiconductor memories, and integrated semiconductor solutions worldwide.

The average volume for Cypress Semiconductor has been 7,413,700 shares per day over the past 30 days. Cypress Semiconductor has a market cap of $3.1 billion and is part of the electronics industry. Shares are down 35.7% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Cypress Semiconductor

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. 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:

  • CY's very impressive revenue growth greatly exceeded the industry average of 11.3%. Since the same quarter one year prior, revenues leaped by 164.0%. 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.
  • CY's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that CY's debt-to-equity ratio is low, the quick ratio, which is currently 0.66, displays a potential problem in covering short-term cash needs.
  • Net operating cash flow has significantly decreased to -$65.31 million or 247.39% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 1045.2% when compared to the same quarter one year ago, falling from $9.53 million to -$90.05 million.

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BGC Partners

Dividend Yield: 6.80%

BGC Partners

(NASDAQ:

BGCP

) shares currently have a dividend yield of 6.80%.

BGC Partners, Inc. operates as a brokerage company in the United Kingdom, the United States, and internationally. It operates in two segments, Financial Services and Real Estate Services. The company has a P/E ratio of 164.60.

The average volume for BGC Partners has been 1,316,400 shares per day over the past 30 days. BGC Partners has a market cap of $1.8 billion and is part of the financial services industry. Shares are down 10.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

BGC Partners

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 increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • BGCP's very impressive revenue growth greatly exceeded the industry average of 6.9%. Since the same quarter one year prior, revenues leaped by 60.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 23.0% when compared to the same quarter one year prior, going from $7.60 million to $9.35 million.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • The gross profit margin for BGC PARTNERS INC is currently extremely low, coming in at 8.42%. Regardless of BGCP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, BGCP's net profit margin of 1.39% is significantly lower than the industry average.
  • 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 Capital Markets industry and the overall market, BGC PARTNERS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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Targa Resources Partners

Dividend Yield: 10.00%

Targa Resources Partners

(NYSE:

NGLS

) shares currently have a dividend yield of 10.00%.

Targa Resources Partners LP owns, operates, acquires, and develops midstream energy assets in the United States. The company has a P/E ratio of 21.19.

The average volume for Targa Resources Partners has been 1,144,300 shares per day over the past 30 days. Targa Resources Partners has a market cap of $6.1 billion and is part of the energy industry. Shares are down 33.3% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Targa Resources Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, 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 disappointing return on equity, a generally disappointing performance in the stock itself and deteriorating net income.

Highlights from the ratings report include:

  • Net operating cash flow has increased to $209.80 million or 49.43% when compared to the same quarter last year. In addition, TARGA RESOURCES PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -19.64%.
  • The debt-to-equity ratio is somewhat low, currently at 0.77, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 51.93%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 98.43% 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.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TARGA RESOURCES PARTNERS LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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