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."

Global Partners

Dividend Yield: 13.60%

Global Partners

(NYSE:

GLP

) shares currently have a dividend yield of 13.60%.

Global Partners LP, a midstream logistics and marketing company, distributes gasoline, distillates, residual oil, and renewable fuels to wholesalers, retailers, and commercial customers in the New England states and New York. The company has a P/E ratio of 12.37.

The average volume for Global Partners has been 386,700 shares per day over the past 30 days. Global Partners has a market cap of $461.7 million and is part of the wholesale industry. Shares are down 19.2% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Global Partners

as a

hold

. Among the primary strengths of the company is its reasonable valuation levels, considering its current price compared to earnings, book value and other measures. At the same time, however, we also find weaknesses including generally higher debt management risk, weak operating cash flow and deteriorating net income.

Highlights from the ratings report include:

  • GLP, with its decline in revenue, slightly underperformed the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 38.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • GLOBAL 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, GLOBAL PARTNERS LP increased its bottom line by earning $3.96 versus $1.43 in the prior year. For the next year, the market is expecting a contraction of 109.1% in earnings (-$0.36 versus $3.96).
  • Currently the debt-to-equity ratio of 1.90 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, GLP has a quick ratio of 0.68, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly decreased to $51.84 million or 64.09% 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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NuStar GP Holdings

Dividend Yield: 10.60%

NuStar GP Holdings

(NYSE:

NSH

) shares currently have a dividend yield of 10.60%.

NuStar GP Holdings, LLC, through its ownership interests in NuStar Energy L.P., engages in the transportation of petroleum products and anhydrous ammonia. The company is also involved in the terminalling, storage, and marketing of petroleum products. The company has a P/E ratio of 13.20.

The average volume for NuStar GP Holdings has been 205,400 shares per day over the past 30 days. NuStar GP Holdings has a market cap of $883.5 million and is part of the energy industry. Shares are up 4.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

NuStar GP Holdings

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 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 34.6%. Since the same quarter one year prior, revenues slightly increased by 5.5%. 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.
  • The gross profit margin for NUSTAR GP HOLDINGS LLC is currently very high, coming in at 100.00%. NSH has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, NSH's net profit margin of 74.52% significantly outperformed against the industry.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 9.8% when compared to the same quarter one year ago, dropping from $14.37 million to $12.96 million.
  • NUSTAR GP HOLDINGS LLC's earnings per share declined by 11.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NUSTAR GP HOLDINGS LLC increased its bottom line by earning $1.68 versus $1.44 in the prior year. For the next year, the market is expecting a contraction of 12.5% in earnings ($1.47 versus $1.68).
  • Looking at the price performance of NSH's shares over the past 12 months, there is not much good news to report: the stock is down 43.30%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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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Whitestone REIT

Dividend Yield: 9.50%

Whitestone REIT

(NYSE:

WSR

) shares currently have a dividend yield of 9.50%.

WhiteStone REIT is a Maryland REIT engaged in owning and operating commercial properties in culturally diverse markets in major metropolitan areas. The company has a P/E ratio of 51.00.

The average volume for Whitestone REIT has been 176,000 shares per day over the past 30 days. Whitestone REIT has a market cap of $324.0 million and is part of the real estate industry. Shares are up 4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Whitestone REIT

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share 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 deteriorating net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 7.9%. Since the same quarter one year prior, revenues rose by 33.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • WHITESTONE REIT 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, WHITESTONE REIT increased its bottom line by earning $0.24 versus $0.22 in the prior year. This year, the market expects an improvement in earnings ($0.30 versus $0.24).
  • 44.83% is the gross profit margin for WHITESTONE REIT which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, WSR's net profit margin of 7.99% significantly trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Real Estate Investment Trusts (REITs) industry average. The net income has significantly decreased by 28.2% when compared to the same quarter one year ago, falling from $2.86 million to $2.05 million.
  • WSR has underperformed the S&P 500 Index, declining 22.31% 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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