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."

Joy Global

Dividend Yield: 5.20%

Joy Global

(NYSE:

JOY

) shares currently have a dividend yield of 5.20%.

Joy Global Inc. manufactures and services mining equipment for the extraction of coal, copper, iron ore, oil sands, gold, and other minerals. It operates in two segments, Underground Mining Machinery and Surface Mining Equipment. The company has a P/E ratio of 6.30.

The average volume for Joy Global has been 5,391,200 shares per day over the past 30 days. Joy Global has a market cap of $1.5 billion and is part of the industrial industry. Shares are down 66.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Joy Global

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 largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income and poor profit margins.

Highlights from the ratings report include:

  • Net operating cash flow has increased to $115.95 million or 26.50% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -18.51%.
  • The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.96 is somewhat weak and could be cause for future problems.
  • 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 the Machinery industry average. The net income has significantly decreased by 37.0% when compared to the same quarter one year ago, falling from $71.29 million to $44.89 million.
  • The gross profit margin for JOY GLOBAL INC is currently lower than what is desirable, coming in at 32.07%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.66% trails that of the industry average.

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Mattel

Dividend Yield: 6.10%

Mattel

(NASDAQ:

MAT

) shares currently have a dividend yield of 6.10%.

Mattel, Inc. designs, manufactures, and markets a range of toy products worldwide. The company operates in three segments: North America, International, and American Girl. The company has a P/E ratio of 27.88.

The average volume for Mattel has been 5,296,900 shares per day over the past 30 days. Mattel has a market cap of $8.4 billion and is part of the consumer durables industry. Shares are down 19.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Mattel

as a

hold

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins 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, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 128.29% to $18.44 million when compared to the same quarter last year. In addition, MATTEL INC has also vastly surpassed the industry average cash flow growth rate of 11.73%.
  • The gross profit margin for MATTEL INC is rather high; currently it is at 52.34%. Regardless of MAT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MAT's net profit margin of 12.48% compares favorably to the industry average.
  • MAT, with its decline in revenue, underperformed when compared the industry average of 1.3%. Since the same quarter one year prior, revenues fell by 11.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • MATTEL INC's earnings per share declined by 31.9% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, MATTEL INC reported lower earnings of $1.46 versus $2.60 in the prior year. For the next year, the market is expecting a contraction of 13.7% in earnings ($1.26 versus $1.46).
  • 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 Leisure Equipment & Products industry average. The net income has significantly decreased by 32.6% when compared to the same quarter one year ago, falling from $331.84 million to $223.78 million.

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CVR Energy

Dividend Yield: 4.20%

CVR Energy

(NYSE:

CVI

) shares currently have a dividend yield of 4.20%.

CVR Energy, Inc., through its subsidiaries, engages in petroleum refining and nitrogen fertilizer manufacturing activities in the United States. The company operates through two segments, Petroleum and Nitrogen Fertilizer. The company has a P/E ratio of 18.77.

The average volume for CVR Energy has been 323,100 shares per day over the past 30 days. CVR Energy has a market cap of $4.1 billion and is part of the energy industry. Shares are up 22.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

CVR Energy

as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, 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 and poor profit margins.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 632.9% when compared to the same quarter one year prior, rising from $7.90 million to $57.90 million.
  • CVI's debt-to-equity ratio of 0.63 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that CVI's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.03 is high and demonstrates strong liquidity.
  • The gross profit margin for CVR ENERGY INC is currently extremely low, coming in at 13.22%. Regardless of CVI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CVI's net profit margin of 4.10% compares favorably to the industry average.
  • CVI has underperformed the S&P 500 Index, declining 5.16% 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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