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."

Goldman Sachs BDC

Dividend Yield: 9.00%

Goldman Sachs BDC

(NYSE:

GSBD

) shares currently have a dividend yield of 9.00%.

Goldman Sachs BDC, Inc. is a business development company specializing in middle market and mezzanine investment in private companies.

The average volume for Goldman Sachs BDC has been 91,600 shares per day over the past 30 days. Goldman Sachs BDC has a market cap of $725.9 million and is part of the real estate industry. Shares are up 5.4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Goldman Sachs BDC

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and notable return on equity. 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 weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 23.7%. Since the same quarter one year prior, revenues rose by 18.9%. 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 GOLDMAN SACHS BDC INC is currently very high, coming in at 77.36%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.23% is above that of the industry average.
  • When compared to other companies in the Capital Markets industry and the overall market, GOLDMAN SACHS BDC INC's return on equity is below that of both the industry average and the S&P 500.
  • The share price of GOLDMAN SACHS BDC INC has not done very well: it is down 15.48% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Capital Markets industry. The net income has significantly decreased by 61.5% when compared to the same quarter one year ago, falling from $14.03 million to $5.40 million.

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WhiteHorse Finance

Dividend Yield: 12.60%

WhiteHorse Finance

(NASDAQ:

WHF

) shares currently have a dividend yield of 12.60%.

Whitehorse Finance, LLC is a business development company. The company has a P/E ratio of 7.61.

The average volume for WhiteHorse Finance has been 33,400 shares per day over the past 30 days. WhiteHorse Finance has a market cap of $206.3 million and is part of the financial services industry. Shares are down 0.7% year-to-date as of the close of trading on Thursday.

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TheStreet Recommends

TheStreet Ratings rates

WhiteHorse Finance

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 23.7%. Since the same quarter one year prior, revenues rose by 19.0%. 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 WHITEHORSE FINANCE INC is rather high; currently it is at 64.71%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 41.25% significantly outperformed against the industry average.
  • Net operating cash flow has significantly decreased to -$4.76 million or 142.83% when compared to the same quarter last year. Despite a decrease in cash flow of 142.83%, WHITEHORSE FINANCE INC is still significantly exceeding the industry average of -199.13%.
  • 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, WHITEHORSE FINANCE INC's return on equity significantly trails that of both the industry average and the S&P 500.

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Rose Rock Midstream

Dividend Yield: 10.00%

Rose Rock Midstream

(NYSE:

RRMS

) shares currently have a dividend yield of 10.00%.

Rose Rock Midstream, L.P. owns, operates, develops, and acquires a portfolio of midstream energy assets. It gathers, transports, stores, distributes, and markets crude oil in Colorado, Kansas, Minnesota, Montana, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas, and Wyoming. The company has a P/E ratio of 24.66.

The average volume for Rose Rock Midstream has been 228,400 shares per day over the past 30 days. Rose Rock Midstream has a market cap of $972.1 million and is part of the energy industry. Shares are up 70.9% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Rose Rock Midstream

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • RRMS's very impressive revenue growth greatly exceeded the industry average of 24.1%. Since the same quarter one year prior, revenues leaped by 51.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ROSE ROCK MIDSTREAM LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • ROSE ROCK MIDSTREAM LP 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, ROSE ROCK MIDSTREAM LP reported lower earnings of $0.79 versus $1.52 in the prior year. This year, the market expects an improvement in earnings ($1.44 versus $0.79).
  • RRMS'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 43.56%, 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. 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.
  • The debt-to-equity ratio is very high at 3.34 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, RRMS maintains a poor quick ratio of 1.00, which illustrates the inability to avoid short-term cash problems.

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