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."

Fibria Celulose

Dividend Yield: 14.70%

Fibria Celulose

(NYSE:

FBR

) shares currently have a dividend yield of 14.70%.

Fibria Celulose S.A. engages in the production, sale, and export of eucalyptus pulp, wood, and other forest products. The company has a P/E ratio of 30.47.

The average volume for Fibria Celulose has been 1,281,100 shares per day over the past 30 days. Fibria Celulose has a market cap of $7.3 billion and is part of the consumer non-durables industry. Shares are up 7.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Fibria Celulose

as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share and increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:

  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • FIBRIA CELULOSE SA has improved earnings per share by 9.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, FIBRIA CELULOSE SA turned its bottom line around by earning $0.11 versus -$0.54 in the prior year. This year, the market expects an improvement in earnings ($1.45 versus $0.11).
  • The gross profit margin for FIBRIA CELULOSE SA is rather high; currently it is at 65.02%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -38.09% is in-line with the industry average.
  • FBR, with its decline in revenue, underperformed when compared the industry average of 11.8%. Since the same quarter one year prior, revenues fell by 27.1%. The declining revenue has not hurt the company's bottom line, with increasing 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. Compared to other companies in the Paper & Forest Products industry and the overall market, FIBRIA CELULOSE SA's return on equity significantly trails that of both the industry average and the S&P 500.

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Brandywine Realty

Dividend Yield: 4.40%

Brandywine Realty

(NYSE:

BDN

) shares currently have a dividend yield of 4.40%.

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 104.08.

The average volume for Brandywine Realty has been 1,804,900 shares per day over the past 30 days. Brandywine Realty has a market cap of $2.4 billion and is part of the real estate industry. Shares are down 14.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Recommends

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 6.1%. 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 has underperformed the S&P 500 Index, declining 16.13% 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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Select Income REIT

Dividend Yield: 10.20%

Select Income REIT

(NYSE:

SIR

) shares currently have a dividend yield of 10.20%.

Select Income REIT, a real estate investment trust (REIT), primarily owns and invests in single tenant and net leased properties. The company has a P/E ratio of 16.47.

The average volume for Select Income REIT has been 432,500 shares per day over the past 30 days. Select Income REIT has a market cap of $1.8 billion and is part of the real estate industry. Shares are down 17.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Select Income REIT

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and increase in net income. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • SIR's very impressive revenue growth greatly exceeded the industry average of 6.1%. Since the same quarter one year prior, revenues leaped by 97.3%. 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 SELECT INCOME REIT is rather high; currently it is at 51.52%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, SIR's net profit margin of 27.48% compares favorably to the industry average.
  • SELECT INCOME REIT's earnings per share declined by 15.0% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, SELECT INCOME REIT reported lower earnings of $1.91 versus $2.11 in the prior year. For the next year, the market is expecting a contraction of 42.9% in earnings ($1.09 versus $1.91).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, SELECT INCOME REIT's return on equity is below that of both the industry average and the S&P 500.

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