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."

North European Oil Royalty

Dividend Yield: 7.30%

North European Oil Royalty

(NYSE:

NRT

) shares currently have a dividend yield of 7.30%.

North European Oil Royalty Trust, a grantor trust, holds overriding royalty rights covering gas and oil production in concessions or leases in the Federal Republic of Germany. It holds rights under contracts with German exploration and development subsidiaries of ExxonMobil Corp. The company has a P/E ratio of 6.43.

The average volume for North European Oil Royalty has been 16,900 shares per day over the past 30 days. North European Oil Royalty has a market cap of $80.4 million and is part of the financial services industry. Shares are up 19% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates

North European Oil Royalty

as a

hold

. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • NRT, with its decline in revenue, underperformed when compared the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 46.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 49.2% when compared to the same quarter one year ago, falling from $3.10 million to $1.57 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 27.44%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 54.28% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • NORTH EUROPEAN OIL RTY TR 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, NORTH EUROPEAN OIL RTY TR reported lower earnings of $1.27 versus $1.97 in the prior year.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Garrison Capital

Dividend Yield: 13.60%

Garrison Capital

(NASDAQ:

GARS

) shares currently have a dividend yield of 13.60%.

Garrison Capital Inc. is a business development company specializing in investments primarily in the debt and equity of middle market companies. The company has a P/E ratio of 14.27.

The average volume for Garrison Capital has been 49,400 shares per day over the past 30 days. Garrison Capital has a market cap of $167.9 million and is part of the financial services industry. Shares are down 11% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates

Garrison Capital

as a

hold

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

Highlights from the ratings report include:

  • GARS's revenue growth has slightly outpaced the industry average of 4.3%. Since the same quarter one year prior, revenues slightly increased by 2.0%. 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.
  • Net operating cash flow has significantly increased by 211.88% to $39.18 million when compared to the same quarter last year. In addition, GARRISON CAPITAL INC has also vastly surpassed the industry average cash flow growth rate of 138.56%.
  • The gross profit margin for GARRISON CAPITAL INC is currently very high, coming in at 76.63%. 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 -1.82% is in-line with the industry average.
  • 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. When compared to other companies in the Capital Markets industry and the overall market, GARRISON CAPITAL INC's return on equity is below that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 30.40%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 103.33% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

New Mountain Finance

Dividend Yield: 10.70%

New Mountain Finance

(NYSE:

NMFC

) shares currently have a dividend yield of 10.70%.

New Mountain Finance Corporation is a Business Development Company specializing in investments in middle market companies and debt securities at various levels of the capital structure, including first and second lien debt, unsecured notes, bonds, and mezzanine securities. The company has a P/E ratio of 8.68.

The average volume for New Mountain Finance has been 418,300 shares per day over the past 30 days. New Mountain Finance has a market cap of $810.0 million and is part of the financial services industry. Shares are down 3% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates

New Mountain Finance

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 4.3%. Since the same quarter one year prior, revenues slightly increased by 7.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 32.3% when compared to the same quarter one year prior, rising from $7.41 million to $9.80 million.
  • NEW MOUNTAIN FINANCE CORP has improved earnings per share by 21.4% 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, NEW MOUNTAIN FINANCE CORP reported lower earnings of $0.87 versus $1.79 in the prior year. This year, the market expects an improvement in earnings ($1.38 versus $0.87).
  • 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 Capital Markets industry and the overall market, NEW MOUNTAIN FINANCE CORP's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$163.20 million or 1145.95% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Other helpful dividend tools from TheStreet: