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."

National American University Holdings

Dividend Yield: 8.20%

National American University Holdings

(NASDAQ:

NAUH

) shares currently have a dividend yield of 8.20%.

National American University Holdings, Inc. owns and operates National American University (NAU) that provides postsecondary education services primarily for working adults and other non-traditional students in the United States. The company operates through two segments, NAU and Other. The company has a P/E ratio of 16.92.

The average volume for National American University Holdings has been 23,000 shares per day over the past 30 days. National American University Holdings has a market cap of $55.4 million and is part of the diversified services industry. Shares are down 19.3% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

National American University Holdings

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 expanding profit margins. 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:

  • NAUH's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.65, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for NATIONAL AMERN UNIV HLDG INC is currently very high, coming in at 75.09%. Regardless of NAUH's high profit margin, it has managed to decrease from the same period last year.
  • Net operating cash flow has decreased to $8.32 million or 47.26% when compared to the same quarter last year. Despite a decrease in cash flow of 47.26%, NATIONAL AMERN UNIV HLDG INC is in line with the industry average cash flow growth rate of -53.99%.
  • 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 Diversified Consumer Services industry and the overall market, NATIONAL AMERN UNIV HLDG INC's return on equity is below that of both the industry average and the S&P 500.

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FS Investment

Dividend Yield: 9.80%

FS Investment

(NYSE:

FSIC

) shares currently have a dividend yield of 9.80%.

FS Investment Corporation is a business development company specializing in investments in debt securities. It seeks to purchase interests in loans through secondary market transactions or directly from the target companies as primary market investments. The company has a P/E ratio of 8.89.

The average volume for FS Investment has been 762,700 shares per day over the past 30 days. FS Investment has a market cap of $2.2 billion and is part of the financial services industry. Shares are down 9.3% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

FS Investment

as a

hold

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

Highlights from the ratings report include:

  • The gross profit margin for FS INVESTMENT CORP is currently very high, coming in at 80.18%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -5.09% is in-line with the industry average.
  • When compared to other companies in the Capital Markets industry and the overall market, FS INVESTMENT CORP's return on equity is below that of both the industry average and the S&P 500.
  • FSIC, with its decline in revenue, slightly underperformed the industry average of 5.8%. Since the same quarter one year prior, revenues fell by 10.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Capital Markets industry. The net income has significantly decreased by 109.5% when compared to the same quarter one year ago, falling from $55.60 million to -$5.28 million.
  • Net operating cash flow has significantly decreased to -$151.80 million or 1496.60% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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Martin Midstream Partners

Dividend Yield: 17.00%

Martin Midstream Partners

(NASDAQ:

MMLP

) shares currently have a dividend yield of 17.00%.

Martin Midstream Partners L.P. collects, transports, stores, and markets petroleum products and by-products in the United States Gulf Coast region. The company has a P/E ratio of 27.75.

The average volume for Martin Midstream Partners has been 177,700 shares per day over the past 30 days. Martin Midstream Partners has a market cap of $679.0 million and is part of the energy industry. Shares are down 30.4% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Martin Midstream Partners

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 reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • MARTIN MIDSTREAM PARTNERS LP 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MARTIN MIDSTREAM PARTNERS LP continued to lose money by earning -$0.15 versus -$0.49 in the prior year. This year, the market expects an improvement in earnings ($0.92 versus -$0.15).
  • 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 112.4% when compared to the same quarter one year prior, rising from -$26.91 million to $3.33 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, MARTIN MIDSTREAM PARTNERS LP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Net operating cash flow has significantly decreased to $8.90 million or 72.23% 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.
  • The debt-to-equity ratio is very high at 2.09 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, MMLP maintains a poor quick ratio of 0.75, which illustrates the inability to avoid short-term cash problems.

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