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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."

Franklin Street Properties

Dividend Yield: 7.40%

Franklin Street Properties

(AMEX:

FSP

) shares currently have a dividend yield of 7.40%.

Franklin Street Properties Corp. is a publicly traded hybrid real estate investment trust. The firm invests in the real estate markets of the United States. It primarily engages in property acquisitions and dispositions, short-term financing, leasing, development and asset management. The company has a P/E ratio of 42.79.

The average volume for Franklin Street Properties has been 363,500 shares per day over the past 30 days. Franklin Street Properties has a market cap of $1.0 billion and is part of the real estate industry. Shares are down 16.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Franklin Street Properties

as a

hold

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

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 102.0% when compared to the same quarter one year prior, rising from $1.57 million to $3.17 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.0%. Since the same quarter one year prior, revenues slightly increased by 1.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • FRANKLIN STREET PROPERTIES 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, FRANKLIN STREET PROPERTIES reported lower earnings of $0.14 versus $0.18 in the prior year. This year, the market expects an improvement in earnings ($0.38 versus $0.14).
  • The gross profit margin for FRANKLIN STREET PROPERTIES is rather low; currently it is at 20.77%. Regardless of FSP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, FSP's net profit margin of 5.14% is significantly lower than the industry average.
  • FSP has underperformed the S&P 500 Index, declining 13.20% 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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Martin Midstream Partners

Dividend Yield: 12.10%

Martin Midstream Partners

(NASDAQ:

MMLP

) shares currently have a dividend yield of 12.10%.

Martin Midstream Partners L.P. collects, transports, stores, and markets petroleum products and by-products in the United States Gulf Coast region. The company has a P/E ratio of 39.09.

The average volume for Martin Midstream Partners has been 133,600 shares per day over the past 30 days. Martin Midstream Partners has a market cap of $956.3 million and is part of the energy industry. Shares are down 2.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

TheStreet Recommends

Martin Midstream Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • MARTIN MIDSTREAM PARTNERS LP reported significant earnings per share improvement 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, MARTIN MIDSTREAM PARTNERS LP continued to lose money by earning -$0.15 versus -$0.49 in the prior year. This year, the market expects an improvement in earnings ($0.87 versus -$0.15).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 112.4% when compared to the same quarter one year prior, rising from -$26.91 million to $3.33 million.
  • MMLP, with its decline in revenue, slightly underperformed the industry average of 37.2%. Since the same quarter one year prior, revenues fell by 40.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has significantly decreased to $8.90 million or 72.23% 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.
  • The debt-to-equity ratio is very high at 2.09 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, MMLP maintains a poor quick ratio of 0.75, which illustrates the inability to avoid short-term cash problems.

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Archrock Partners

Dividend Yield: 13.10%

Archrock Partners

(NASDAQ:

APLP

) shares currently have a dividend yield of 13.10%.

Exterran Partners, L.P., together with its subsidiaries, provides natural gas contract operations services to customers in the United States. The company has a P/E ratio of 18.25.

The average volume for Archrock Partners has been 210,600 shares per day over the past 30 days. Archrock Partners has a market cap of $1.0 billion and is part of the energy industry. Shares are down 21.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Archrock Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 31.2%. Since the same quarter one year prior, revenues slightly increased by 6.6%. 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.
  • 48.19% is the gross profit margin for ARCHROCK PARTNERS LP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.04% trails the industry average.
  • ARCHROCK PARTNERS 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. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ARCHROCK PARTNERS LP reported lower earnings of $0.88 versus $1.18 in the prior year. This year, the market expects an improvement in earnings ($1.07 versus $0.88).
  • The change in net income from the same quarter one year ago has exceeded that of the Energy Equipment & Services industry average, but is less than that of the S&P 500. The net income has significantly decreased by 36.5% when compared to the same quarter one year ago, falling from $18.10 million to $11.50 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 30.71%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 57.69% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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