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."

Guess

Dividend Yield: 4.80%

Guess

(NYSE:

GES

) shares currently have a dividend yield of 4.80%.

Guess , Inc. designs, markets, distributes, and licenses lifestyle collections of contemporary apparel and accessories for men, women, and children that reflect the American lifestyle and European fashion sensibilities. The company has a P/E ratio of 18.18.

The average volume for Guess has been 1,108,200 shares per day over the past 30 days. Guess has a market cap of $1.6 billion and is part of the retail industry. Shares are down 0.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Guess

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, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • GES's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GES has a quick ratio of 1.83, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 35.17% is the gross profit margin for GUESS INC which we consider to be strong. Regardless of GES's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.52% trails the industry average.
  • 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 Specialty Retail industry. The net income has significantly decreased by 40.1% when compared to the same quarter one year ago, falling from $20.79 million to $12.44 million.
  • 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 Specialty Retail industry and the overall market, GUESS 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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EnLink Midstream Partners

Dividend Yield: 9.30%

EnLink Midstream Partners

(NYSE:

ENLK

) shares currently have a dividend yield of 9.30%.

Enlink Midstream Partners, LP, through its subsidiary, EnLink Midstream Operating, LP, provides midstream energy services.

The average volume for EnLink Midstream Partners has been 829,400 shares per day over the past 30 days. EnLink Midstream Partners has a market cap of $5.4 billion and is part of the energy industry. Shares are up 0.4% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

EnLink Midstream Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 36.8%. Since the same quarter one year prior, revenues rose by 36.5%. 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.
  • Net operating cash flow has increased to $215.70 million or 34.22% when compared to the same quarter last year. In addition, ENLINK MIDSTREAM PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -26.85%.
  • Despite currently having a low debt-to-equity ratio of 0.55, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.95 is weak.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ENLINK MIDSTREAM PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ENLINK MIDSTREAM PARTNERS LP is rather low; currently it is at 17.64%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -64.48% is significantly below that of the industry average.

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Two Harbors Investment

Dividend Yield: 12.70%

Two Harbors Investment

(NYSE:

TWO

) shares currently have a dividend yield of 12.70%.

Two Harbors Investment Corp. The company has a P/E ratio of 12.25.

The average volume for Two Harbors Investment has been 2,920,800 shares per day over the past 30 days. Two Harbors Investment has a market cap of $3.0 billion and is part of the real estate industry. Shares are up 3.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Two Harbors Investment

as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has slightly increased to -$584.29 million or 4.07% when compared to the same quarter last year. Despite an increase in cash flow, TWO HARBORS INVESTMENT CORP's average is still marginally south of the industry average growth rate of 9.44%.
  • The gross profit margin for TWO HARBORS INVESTMENT CORP is currently very high, coming in at 81.30%. Regardless of TWO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TWO's net profit margin of -16.97% significantly underperformed when compared to the industry average.
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 118.0% when compared to the same quarter one year ago, falling from $193.59 million to -$34.79 million.
  • 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, TWO HARBORS INVESTMENT CORP's return on equity is below that of both the industry average and the S&P 500.

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