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: 7.20%

Franklin Street Properties

(AMEX:

FSP

) shares currently have a dividend yield of 7.20%.

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 47.91.

The average volume for Franklin Street Properties has been 441,300 shares per day over the past 30 days. Franklin Street Properties has a market cap of $1.1 billion and is part of the real estate industry. Shares are down 13.2% 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 good cash flow from operations, notable return on equity and increase in net income. 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:

  • Net operating cash flow has increased to $30.66 million or 14.91% when compared to the same quarter last year. Despite an increase in cash flow, FRANKLIN STREET PROPERTIES's average is still marginally south of the industry average growth rate of 16.11%.
  • FRANKLIN STREET PROPERTIES reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse 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 ($0.23 versus $0.14).
  • The gross profit margin for FRANKLIN STREET PROPERTIES is rather low; currently it is at 15.74%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.48% significantly trails the industry average.
  • FSP has underperformed the S&P 500 Index, declining 7.66% 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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Oxbridge Re Holdings

Dividend Yield: 7.90%

Oxbridge Re Holdings

(NASDAQ:

OXBR

) shares currently have a dividend yield of 7.90%.

Oxbridge Re Holdings Limited provides reinsurance business solutions primarily to property and casualty insurers in the Gulf Coast region of the United States. It writes collateralized policies to cover property losses from specified catastrophes. The company has a P/E ratio of 5.28.

The average volume for Oxbridge Re Holdings has been 5,900 shares per day over the past 30 days. Oxbridge Re Holdings has a market cap of $36.8 million and is part of the insurance industry. Shares are up 2.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Oxbridge Re Holdings

as a

hold

. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:

  • Compared to other companies in the Insurance industry and the overall market, OXBRIDGE RE HOLDINGS LTD's return on equity exceeds that of both the industry average and the S&P 500.
  • OXBR's very impressive revenue growth greatly exceeded the industry average of 12.3%. Since the same quarter one year prior, revenues leaped by 129.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • OXBRIDGE RE HOLDINGS LTD 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. During the past fiscal year, OXBRIDGE RE HOLDINGS LTD increased its bottom line by earning $0.67 versus $0.06 in the prior year.
  • OXBR has underperformed the S&P 500 Index, declining 14.39% from its price level of one year ago. 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.
  • Net operating cash flow has declined marginally to -$0.62 million or 9.09% when compared to the same quarter last year. Despite a decrease in cash flow OXBRIDGE RE HOLDINGS LTD is still fairing well by exceeding its industry average cash flow growth rate of -46.37%.

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Evolving Systems

Dividend Yield: 7.10%

Evolving Systems

(NASDAQ:

EVOL

) shares currently have a dividend yield of 7.10%.

Evolving Systems, Inc. provides software solutions and services to the wireless, wireline, and cable markets in the United Kingdom, Nigeria, Mexico, and internationally. The company has a P/E ratio of 15.22.

The average volume for Evolving Systems has been 31,200 shares per day over the past 30 days. Evolving Systems has a market cap of $72.9 million and is part of the computer software & services industry. Shares are down 36.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Evolving Systems

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 reasonable valuation levels. 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 feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • EVOL's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, EVOL has a quick ratio of 2.01, which demonstrates the ability of the company to cover short-term liquidity 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. Compared to other companies in the Software industry and the overall market, EVOLVING SYSTEMS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • EVOL, with its decline in revenue, underperformed when compared the industry average of 10.7%. Since the same quarter one year prior, revenues fell by 23.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 42.13%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 50.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • Net operating cash flow has declined marginally to $0.31 million or 5.23% when compared to the same quarter last year. Despite a decrease in cash flow EVOLVING SYSTEMS INC is still fairing well by exceeding its industry average cash flow growth rate of -31.39%.

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