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."

One Liberty Properties

Dividend Yield: 7.40%

One Liberty Properties

(NYSE:

OLP

) shares currently have a dividend yield of 7.40%.

One Liberty Properties, Inc., a real estate investment trust (REIT), engages in the acquisition, ownership, and management of commercial real estate properties in the United States. The company has a P/E ratio of 18.14.

The average volume for One Liberty Properties has been 38,300 shares per day over the past 30 days. One Liberty Properties has a market cap of $376.2 million and is part of the real estate industry. Shares are up 5% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

One Liberty Properties

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 8.1%. Since the same quarter one year prior, revenues rose by 21.2%. 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.
  • 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 55.2% when compared to the same quarter one year ago, falling from $11.58 million to $5.19 million.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, ONE LIBERTY PROPERTIES INC's return on equity is below that of both the industry average and the S&P 500.

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Apollo Investment

Dividend Yield: 13.90%

Apollo Investment

(NASDAQ:

AINV

) shares currently have a dividend yield of 13.90%.

Apollo Investment Corporation is business development company and operates as a closed-end management investment company. The company invests in middle market companies. It provides direct equity capital, mezzanine and senior secured loans, and subordinated debt and loans.

The average volume for Apollo Investment has been 1,218,500 shares per day over the past 30 days. Apollo Investment has a market cap of $1.3 billion and is part of the financial services industry. Shares are up 10.7% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Apollo Investment

as a

hold

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

Highlights from the ratings report include:

  • Net operating cash flow has increased to $55.91 million or 14.32% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -2.34%.
  • The gross profit margin for APOLLO INVESTMENT CORP is currently very high, coming in at 71.48%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -27.32% is in-line with the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 22.6%. Since the same quarter one year prior, revenues fell by 14.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Looking at the price performance of AINV's shares over the past 12 months, there is not much good news to report: the stock is down 26.04%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.
  • 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. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, APOLLO INVESTMENT CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.

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Gladstone Investment

Dividend Yield: 10.70%

Gladstone Investment

(NASDAQ:

GAIN

) shares currently have a dividend yield of 10.70%.

Gladstone Investment Corporation is a business development company specializing in buyouts; recapitalizations; refinancing existing debt; senior debt securities; junior subordinated debt securities; limited liability company interests, and warrants or options. The company has a P/E ratio of 49.93.

The average volume for Gladstone Investment has been 132,200 shares per day over the past 30 days. Gladstone Investment has a market cap of $211.6 million and is part of the financial services industry. Shares are down 8.9% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Gladstone Investment

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 22.6%. Since the same quarter one year prior, revenues slightly increased by 4.4%. 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.
  • 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. Compared to other companies in the Capital Markets industry and the overall market, GLADSTONE INVESTMENT CORP/DE's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for GLADSTONE INVESTMENT CORP/DE is rather high; currently it is at 67.58%. Regardless of GAIN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GAIN's net profit margin of -51.48% significantly underperformed when compared to the industry average.
  • The share price of GLADSTONE INVESTMENT CORP/DE has not done very well: it is down 8.15% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • 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 181.9% when compared to the same quarter one year ago, falling from $7.59 million to -$6.21 million.

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