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."

Ferrellgas Partners

Dividend Yield: 10.90%

Ferrellgas Partners

(NYSE:

FGP

) shares currently have a dividend yield of 10.90%.

Ferrellgas Partners, L.P. distributes and sells propane and related equipment and supplies primarily in the United States. The company transports propane to propane distribution locations, tanks on customers' premises, or to portable propane tanks delivered to retailers.

The average volume for Ferrellgas Partners has been 442,500 shares per day over the past 30 days. Ferrellgas Partners has a market cap of $1.8 billion and is part of the energy industry. Shares are up 11.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Ferrellgas Partners

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 25.3%. Since the same quarter one year prior, revenues slightly increased by 6.3%. 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.
  • Compared to other companies in the Gas Utilities industry and the overall market, FERRELLGAS PARTNERS -LP's return on equity significantly trails that of both the industry average and 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 Gas Utilities industry. The net income has significantly decreased by 142.7% when compared to the same quarter one year ago, falling from -$32.88 million to -$79.79 million.
  • The debt-to-equity ratio is very high at 21.19 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.44, which clearly demonstrates the inability to cover short-term cash needs.

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UMH Properties

Dividend Yield: 7.60%

UMH Properties

(NYSE:

UMH

) shares currently have a dividend yield of 7.60%.

UMH Properties, Inc. (UMH) is a real estate investment trust. The firm engages in the ownership and operation of manufactured home communities. It leases manufactured home spaces to private manufactured home owners, as well as leases homes to residents. The company has a P/E ratio of 63.53.

The average volume for UMH Properties has been 61,000 shares per day over the past 30 days. UMH Properties has a market cap of $257.4 million and is part of the real estate industry. Shares are down 5.3% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

TheStreet Recommends

UMH Properties

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and relatively strong performance when compared with the S&P 500 during the past year. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • UMH's revenue growth has slightly outpaced the industry average of 7.3%. Since the same quarter one year prior, revenues rose by 15.4%. 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 Real Estate Investment Trusts (REITs) industry. The net income increased by 66.6% when compared to the same quarter one year prior, rising from $0.63 million to $1.05 million.
  • Net operating cash flow has decreased to $3.76 million or 42.69% when compared to the same quarter last year. Despite a decrease in cash flow UMH PROPERTIES INC is still fairing well by exceeding its industry average cash flow growth rate of -69.51%.
  • The gross profit margin for UMH PROPERTIES INC is currently lower than what is desirable, coming in at 30.89%. Regardless of UMH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, UMH's net profit margin of 4.46% is significantly lower than the industry average.

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CSP

Dividend Yield: 7.90%

CSP

(NASDAQ:

CSPI

) shares currently have a dividend yield of 7.90%.

CSP Inc., together with its subsidiaries, develops and markets IT integration solutions and cluster computer systems to commercial and defense customers in the Americas, Europe, and Asia. The company has a P/E ratio of 43.08.

The average volume for CSP has been 7,900 shares per day over the past 30 days. CSP has a market cap of $20.6 million and is part of the computer software & services industry. Shares are down 20.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

CSP

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 17.9%. Since the same quarter one year prior, revenues rose by 15.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CSPI 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. To add to this, CSPI has a quick ratio of 1.82, which demonstrates the ability of the company to cover short-term liquidity needs.
  • CSP INC reported significant earnings per share improvement in the most recent quarter compared to 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, CSP INC swung to a loss, reporting -$0.05 versus $0.38 in the prior year.
  • CSPI's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 26.72%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, CSPI is still more expensive than most of the other companies in its industry.
  • 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. In comparison to the other companies in the IT Services industry and the overall market, CSP INC'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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