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."

Annaly Capital Management

Dividend Yield: 11.30%

Annaly Capital Management

(NYSE:

NLY

) shares currently have a dividend yield of 11.30%.

Annaly Capital Management, Inc. owns a portfolio of real estate related investments in the United States.

The average volume for Annaly Capital Management has been 8,768,000 shares per day over the past 30 days. Annaly Capital Management has a market cap of $9.8 billion and is part of the real estate industry. Shares are up 13.1% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Annaly Capital Management

as a

hold

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 97.35% to -$133.49 million when compared to the same quarter last year. In addition, ANNALY CAPITAL MANAGEMENT has also vastly surpassed the industry average cash flow growth rate of 11.95%.
  • Compared to where it was trading a year ago, NLY's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, ANNALY CAPITAL MANAGEMENT's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 82.2% when compared to the same quarter one year ago, falling from -$476.41 million to -$867.92 million.

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Mosaic

Dividend Yield: 4.30%

Mosaic

(NYSE:

MOS

) shares currently have a dividend yield of 4.30%.

The Mosaic Company, through its subsidiaries, produces and markets concentrated phosphate and potash crop nutrients primarily for the agricultural industry worldwide. The company operates through three segments: Phosphates, Potash, and International Distribution. The company has a P/E ratio of 9.48.

The average volume for Mosaic has been 5,557,300 shares per day over the past 30 days. Mosaic has a market cap of $9.0 billion and is part of the chemicals industry. Shares are down 6.9% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Mosaic

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 and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.09, which illustrates the ability to avoid short-term cash problems.
  • MOS, with its decline in revenue, underperformed when compared the industry average of 7.3%. Since the same quarter one year prior, revenues fell by 21.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Net operating cash flow has significantly decreased to $265.90 million or 59.43% 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 company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Chemicals industry and the overall market, MOSAIC CO's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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Energy Transfer Partners

Dividend Yield: 11.80%

Energy Transfer Partners

(NYSE:

ETP

) shares currently have a dividend yield of 11.80%.

Energy Transfer Partners, L.P. engages in the natural gas midstream, and intrastate transportation and storage businesses in the United States. The company has a P/E ratio of 31.58.

The average volume for Energy Transfer Partners has been 4,258,300 shares per day over the past 30 days. Energy Transfer Partners has a market cap of $18.5 billion and is part of the energy industry. Shares are up 5.8% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Energy Transfer Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and a generally disappointing performance in the stock itself.

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 13.5% when compared to the same quarter one year prior, going from $274.00 million to $311.00 million.
  • Net operating cash flow has significantly increased by 89.72% to $960.00 million when compared to the same quarter last year. In addition, ENERGY TRANSFER PARTNERS -LP has also vastly surpassed the industry average cash flow growth rate of -49.05%.
  • ENERGY TRANSFER PARTNERS -LP has improved earnings per share by 11.8% 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, ENERGY TRANSFER PARTNERS -LP swung to a loss, reporting -$0.08 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($0.88 versus -$0.08).
  • ETP'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 38.21%, 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 of 1.39 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, ETP has a quick ratio of 0.57, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

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