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."

PennyMac Mortgage Investment

Dividend Yield: 12.20%

PennyMac Mortgage Investment

(NYSE:

PMT

) shares currently have a dividend yield of 12.20%.

PennyMac Mortgage Investment Trust, a specialty finance company, invests primarily in residential mortgage loans and mortgage-related assets in the United States. The company operates through two segments, Correspondent Production and Investment Activities. The company has a P/E ratio of 7.46.

The average volume for PennyMac Mortgage Investment has been 940,500 shares per day over the past 30 days. PennyMac Mortgage Investment has a market cap of $1.1 billion and is part of the real estate industry. Shares are down 25.5% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

PennyMac Mortgage Investment

as a

hold

. The company's strengths can be seen in multiple areas, such as its attractive 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 gross profit margin for PENNYMAC MORTGAGE INVEST TR is rather high; currently it is at 65.14%. Regardless of PMT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 28.21% trails the industry average.
  • The revenue fell significantly faster than the industry average of 9.8%. Since the same quarter one year prior, revenues fell by 30.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, PENNYMAC MORTGAGE INVEST TR's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to -$907.28 million or 32.68% 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.

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Brandywine Realty

Dividend Yield: 4.90%

Brandywine Realty

(NYSE:

BDN

) shares currently have a dividend yield of 4.90%.

Brandywine Realty Trust is a publically owned real estate investment trust. The firm invests in real estate markets of the United States. It makes investments in office, mixed-use, and industrial properties. The company has a P/E ratio of 203.67.

The average volume for Brandywine Realty has been 2,038,100 shares per day over the past 30 days. Brandywine Realty has a market cap of $2.2 billion and is part of the real estate industry. Shares are down 21.3% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Brandywine Realty

as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins 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 greatly exceeded that of the S&P 500, but is less than that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 39.4% when compared to the same quarter one year prior, rising from $2.19 million to $3.06 million.
  • BRANDYWINE REALTY TRUST has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. 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, BRANDYWINE REALTY TRUST swung to a loss, reporting -$0.01 versus $0.20 in the prior year. This year, the market expects an improvement in earnings ($0.18 versus -$0.01).
  • 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, BRANDYWINE REALTY TRUST's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for BRANDYWINE REALTY TRUST is currently lower than what is desirable, coming in at 25.52%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.10% significantly trails the industry average.

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CBL & Associates Properties

Dividend Yield: 7.80%

CBL & Associates Properties

(NYSE:

CBL

) shares currently have a dividend yield of 7.80%.

CBL & Associates Properties, Inc. is a public real estate investment trust. It engages in acquisition, development, and management of properties. The fund invests in the real estate markets of United States. Its portfolio consists of enclosed malls and open-air centers. The company has a P/E ratio of 13.85.

The average volume for CBL & Associates Properties has been 1,412,200 shares per day over the past 30 days. CBL & Associates Properties has a market cap of $2.3 billion and is part of the real estate industry. Shares are down 28.4% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

CBL & Associates 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 weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.8%. Since the same quarter one year prior, revenues slightly increased by 0.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 37.44% is the gross profit margin for CBL & ASSOCIATES PPTYS INC which we consider to be strong. Regardless of CBL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CBL's net profit margin of 15.98% is significantly lower than the industry average.
  • CBL has underperformed the S&P 500 Index, declining 22.48% 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.
  • Net operating cash flow has declined marginally to $113.66 million or 4.62% 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.

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