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."

Harte-Hanks

Dividend Yield: 9.70%

Harte-Hanks

(NYSE:

HHS

) shares currently have a dividend yield of 9.70%.

Harte-Hanks, Inc. provides various marketing services in the United States and internationally. The company operates in two segments, Customer Interaction and Trillium Software. The company has a P/E ratio of 15.95.

The average volume for Harte-Hanks has been 308,000 shares per day over the past 30 days. Harte-Hanks has a market cap of $216.5 million and is part of the media industry. Shares are down 53.9% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Harte-Hanks

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 a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and unimpressive growth in net income.

Highlights from the ratings report include:

  • HHS's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.19, which illustrates the ability to avoid short-term cash problems.
  • HHS, with its decline in revenue, underperformed when compared the industry average of 6.4%. Since the same quarter one year prior, revenues fell by 12.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • HARTE HANKS INC 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. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, HARTE HANKS INC reported lower earnings of $0.38 versus $0.39 in the prior year. For the next year, the market is expecting a contraction of 18.4% in earnings ($0.31 versus $0.38).
  • 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 Media industry. The net income has significantly decreased by 174.0% when compared to the same quarter one year ago, falling from $5.64 million to -$4.17 million.

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United Development Funding IV

Dividend Yield: 9.00%

United Development Funding IV

(NASDAQ:

UDF

) shares currently have a dividend yield of 9.00%.

United Development Funding IV operates as a real estate investment trust (REIT) in the United States. The company has a P/E ratio of 10.08.

The average volume for United Development Funding IV has been 109,400 shares per day over the past 30 days. United Development Funding IV has a market cap of $559.3 million and is part of the real estate industry. Shares are down 2.3% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

United Development Funding IV

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 revenue growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • UNITED DEV FUNDING IV has improved earnings per share by 34.3% in the most recent quarter compared to the same quarter a year ago.
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 25.6% when compared to the same quarter one year prior, rising from $11.39 million to $14.30 million.
  • The gross profit margin for UNITED DEV FUNDING IV is currently very high, coming in at 74.94%. Regardless of UDF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, UDF's net profit margin of 63.17% significantly outperformed against the industry.
  • UDF is off 7.65% from its price level of one year ago, reflecting the general market trend and ignoring their higher earnings per share compared to the year-earlier quarter.
  • When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, UNITED DEV FUNDING IV's return on equity is below that of both the industry average and the S&P 500.

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Harvest Capital Credit

Dividend Yield: 11.00%

Harvest Capital Credit

(NASDAQ:

HCAP

) shares currently have a dividend yield of 11.00%.

Harvest Capital Credit LLC is a business development company providing structured credit to small businesses. The company has a P/E ratio of 7.94.

The average volume for Harvest Capital Credit has been 18,800 shares per day over the past 30 days. Harvest Capital Credit has a market cap of $76.4 million and is part of the financial services industry. Shares are up 6.1% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Harvest Capital Credit

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 32.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for HARVEST CAPITAL CREDIT CORP is rather high; currently it is at 61.29%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 68.35% significantly outperformed against the industry average.
  • HARVEST CAPITAL CREDIT CORP has improved earnings per share by 30.8% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, HARVEST CAPITAL CREDIT CORP increased its bottom line by earning $1.52 versus $0.47 in the prior year. For the next year, the market is expecting a contraction of 13.2% in earnings ($1.32 versus $1.52).
  • 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. When compared to other companies in the Capital Markets industry and the overall market, HARVEST CAPITAL CREDIT CORP's return on equity is below that of both the industry average and the S&P 500.
  • HCAP has underperformed the S&P 500 Index, declining 10.87% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

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