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."

Dorchester Minerals

Dividend Yield: 7.60%

Dorchester Minerals

(NASDAQ:

DMLP

) shares currently have a dividend yield of 7.60%.

Dorchester Minerals, L.P. engages in the acquisition, ownership, and administration of producing and nonproducing natural gas and crude oil royalty, net profits, and leasehold interests in the United States. The company has a P/E ratio of 17.45.

The average volume for Dorchester Minerals has been 90,300 shares per day over the past 30 days. Dorchester Minerals has a market cap of $321.2 million and is part of the financial services industry. Shares are up 3.2% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Dorchester Minerals

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 weak operating cash flow, a generally disappointing performance in the stock itself and deteriorating net income.

Highlights from the ratings report include:

  • DMLP 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 8.57, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for DORCHESTER MINERALS -LP is currently very high, coming in at 91.97%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 36.32% significantly outperformed against the industry average.
  • DORCHESTER MINERALS -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. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, DORCHESTER MINERALS -LP increased its bottom line by earning $1.42 versus $1.37 in the prior year.
  • The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 75.5% when compared to the same quarter one year ago, falling from $10.97 million to $2.68 million.
  • Net operating cash flow has significantly decreased to $6.40 million or 56.52% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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Textainer Group Holdings

Dividend Yield: 9.00%

Textainer Group Holdings

(NYSE:

TGH

) shares currently have a dividend yield of 9.00%.

Textainer Group Holdings Limited, together with its subsidiaries, engages in the purchase, ownership, management, leasing, and disposal of a fleet of intermodal containers worldwide. It operates through three segments: Container Ownership, Container Management, and Container Resale. The company has a P/E ratio of 3.53.

The average volume for Textainer Group Holdings has been 430,300 shares per day over the past 30 days. Textainer Group Holdings has a market cap of $610.6 million and is part of the diversified services industry. Shares are down 26.1% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Textainer Group Holdings

as a

hold

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

Highlights from the ratings report include:

  • The gross profit margin for TEXTAINER GROUP HOLDINGS LTD is currently very high, coming in at 87.11%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 7.29% is above that of the industry average.
  • TGH, with its decline in revenue, slightly underperformed the industry average of 4.1%. Since the same quarter one year prior, revenues slightly dropped by 6.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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. In comparison to the other companies in the Trading Companies & Distributors industry and the overall market, TEXTAINER GROUP HOLDINGS LTD's return on equity is significantly below that of the industry average and is below that of 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 Trading Companies & Distributors industry. The net income has significantly decreased by 81.8% when compared to the same quarter one year ago, falling from $54.30 million to $9.89 million.

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Mercer International

Dividend Yield: 7.10%

Mercer International

(NASDAQ:

MERC

) shares currently have a dividend yield of 7.10%.

Mercer International Inc., together with its subsidiaries, manufactures and sells northern bleached softwood kraft (NBSK) pulp worldwide. The company has a P/E ratio of 7.57.

The average volume for Mercer International has been 149,800 shares per day over the past 30 days. Mercer International has a market cap of $419.9 million and is part of the consumer non-durables industry. Shares are down 28.1% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Mercer International

as a

hold

. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 94.55% to $71.69 million when compared to the same quarter last year. In addition, MERCER INTL INC has also vastly surpassed the industry average cash flow growth rate of 1.75%.
  • MERC, with its decline in revenue, underperformed when compared the industry average of 1.5%. Since the same quarter one year prior, revenues fell by 10.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Currently the debt-to-equity ratio of 1.71 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Regardless of the company's weak debt-to-equity ratio, MERC has managed to keep a strong quick ratio of 2.10, which demonstrates the ability to cover short-term cash needs.
  • 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 Paper & Forest Products industry. The net income has significantly decreased by 73.1% when compared to the same quarter one year ago, falling from $88.34 million to $23.76 million.

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