Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer

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."

FS Investment

Dividend Yield: 8.80%

FS Investment

(NYSE:

FSIC

) shares currently have a dividend yield of 8.80%.

FS Investment Corporation is a business development company specializing in investments in debt securities. It seeks to purchase interests in loans through secondary market transactions or directly from the target companies as primary market investments. The company has a P/E ratio of 9.97.

The average volume for FS Investment has been 781,100 shares per day over the past 30 days. FS Investment has a market cap of $2.5 billion and is part of the financial services industry. Shares are up 0.3% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

FS Investment

as a

hold

. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow.

Highlights from the ratings report include:

  • The gross profit margin for FS INVESTMENT CORP is rather high; currently it is at 63.47%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 64.82% significantly outperformed against the industry average.
  • In its most recent trading session, FSIC has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Capital Markets industry average, but is greater than that of the S&P 500. The net income has decreased by 12.0% when compared to the same quarter one year ago, dropping from $80.06 million to $70.43 million.
  • Net operating cash flow has significantly decreased to $23.21 million or 74.64% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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TICC Capital

Dividend Yield: 16.80%

TICC Capital

(NASDAQ:

TICC

) shares currently have a dividend yield of 16.80%.

TICC Capital Corp., a business development company, operates as a closed-end, non-diversified management investment company. The firm invests in both public and private companies. The company has a P/E ratio of 10.28.

The average volume for TICC Capital has been 330,100 shares per day over the past 30 days. TICC Capital has a market cap of $413.3 million and is part of the financial services industry. Shares are down 11.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

TICC Capital

as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins 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 disappointing return on equity.

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 Capital Markets industry. The net income increased by 57.0% when compared to the same quarter one year prior, rising from $13.26 million to $20.82 million.
  • Since the same quarter one year prior, revenues fell by 24.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has slightly increased to $19.49 million or 5.03% when compared to the same quarter last year. Despite an increase in cash flow of 5.03%, TICC CAPITAL CORP is still growing at a significantly lower rate than the industry average of 189.47%.
  • TICC'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 27.92%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • 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, TICC CAPITAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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New York Mortgage

Dividend Yield: 14.10%

New York Mortgage

(NASDAQ:

NYMT

) shares currently have a dividend yield of 14.10%.

New York Mortgage Trust, Inc., a real estate investment trust (REIT), engages in acquiring, investing in, financing, and managing mortgage-related and financial assets in the United States. The company has a P/E ratio of 5.49.

The average volume for New York Mortgage has been 1,041,400 shares per day over the past 30 days. New York Mortgage has a market cap of $839.9 million and is part of the real estate industry. Shares are down 0.4% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

New York Mortgage

as a

hold

. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels and increase in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, NEW YORK MORTGAGE TRUST INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 3.7% when compared to the same quarter one year prior, going from $22.71 million to $23.54 million.
  • The gross profit margin for NEW YORK MORTGAGE TRUST INC is currently lower than what is desirable, coming in at 26.18%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 23.41% trails that of the industry average.
  • Net operating cash flow has decreased to $5.99 million or 43.37% 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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