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." Ellomay CapitalDividend Yield: 11.30%Ellomay Capital (AMEX: ELLO) shares currently have a dividend yield of 11.30%. Ellomay Capital Ltd. produces renewable and clean energy in Italy and Spain. The company has a P/E ratio of 11.39. The average volume for Ellomay Capital has been 900 shares per day over the past 30 days. Ellomay Capital has a market cap of $85.2 million and is part of the utilities industry. Shares are down 6.6% year-to-date as of the close of trading on Monday. EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE. TheStreet Ratings rates Ellomay Capital 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, notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself. Highlights from the ratings report include:

  • The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 2.82, which clearly demonstrates the ability to cover short-term cash needs.
  • 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 Independent Power Producers & Energy Traders industry and the overall market, ELLOMAY CAPITAL LTD's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The share price of ELLOMAY CAPITAL LTD is down 5.01% when compared to where it was trading one year earlier. This reflects both (a) the trend in the overall market as well as (b) the sharp decline in the company's earnings per share. 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.
  • Net operating cash flow has significantly decreased to $0.33 million or 81.56% 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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Student Transportation

Dividend Yield: 8.90%

Student Transportation

(NASDAQ:

STB

) shares currently have a dividend yield of 8.90%. Student Transportation Inc., together with its subsidiaries, provides student transportation solutions in North America. The company offers contracted, managed, special needs transportation, direct-to-parent, and charter services. The average volume for Student Transportation has been 124,500 shares per day over the past 30 days. Student Transportation has a market cap of $479.1 million and is part of the transportation industry. Shares are up 33.7% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Student Transportation

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and poor profit margins. Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 14.9%. Since the same quarter one year prior, revenues slightly increased by 6.3%. 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 Road & Rail industry. The net income increased by 56.4% when compared to the same quarter one year prior, rising from $3.54 million to $5.53 million.
  • STUDENT TRANSPORTATION INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, STUDENT TRANSPORTATION INC's EPS of $0.02 remained unchanged from the prior years' EPS of $0.02.
  • Net operating cash flow has decreased to $4.03 million or 46.52% 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.
  • STB has underperformed the S&P 500 Index, declining 12.31% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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Alliance Holdings GP

Dividend Yield: 12.50%

Alliance Holdings GP

(NASDAQ:

AHGP

) shares currently have a dividend yield of 12.50%. Alliance Holdings GP, L.P. and subsidiaries, produces and markets coal primarily to utilities and industrial users in the United States. The company engages in the production of a range of steam coal with varying sulfur and heat contents. The company has a P/E ratio of 4.93. The average volume for Alliance Holdings GP has been 176,000 shares per day over the past 30 days. Alliance Holdings GP has a market cap of $1.1 billion and is part of the metals & mining industry. Shares are down 12.7% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Alliance Holdings GP

as a

hold

. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, generally higher debt management risk and weak operating cash flow. Highlights from the ratings report include:

  • 37.04% is the gross profit margin for ALLIANCE HOLDINGS GP LP which we consider to be strong. Regardless of AHGP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AHGP's net profit margin of 7.47% compares favorably to the industry average.
  • Currently the debt-to-equity ratio of 1.86 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.39, which clearly demonstrates the inability to cover short-term cash needs.
  • Net operating cash flow has significantly decreased to $80.28 million or 50.15% 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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