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."

SeaWorld Entertainment

Dividend Yield: 4.20%

SeaWorld Entertainment

(NYSE:

SEAS

) shares currently have a dividend yield of 4.20%.

SeaWorld Entertainment, Inc. operates as a theme park and entertainment company in the United States. The company has a P/E ratio of 76.27.

The average volume for SeaWorld Entertainment has been 1,861,200 shares per day over the past 30 days. SeaWorld Entertainment has a market cap of $1.8 billion and is part of the leisure industry. Shares are up 11.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

SeaWorld Entertainment

as a

hold

. The company's strengths can be seen in multiple areas, such as its expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • SEAS, with its decline in revenue, slightly underperformed the industry average of 0.5%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 43.23% is the gross profit margin for SEAWORLD ENTERTAINMENT INC which we consider to be strong. Regardless of SEAS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SEAS's net profit margin of 1.48% is significantly lower than the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The debt-to-equity ratio is very high at 3.30 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.33, which clearly demonstrates the inability to cover short-term cash needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Hotels, Restaurants & Leisure industry and the overall market, SEAWORLD ENTERTAINMENT INC'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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BioMed Realty

Dividend Yield: 4.50%

BioMed Realty

(NYSE:

BMR

) shares currently have a dividend yield of 4.50%.

BioMed Realty Trust, Inc. operates as a real estate investment trust (REIT) that focuses on providing real estate to the life science industry in the United States. The company has a P/E ratio of 23.29.

The average volume for BioMed Realty has been 4,239,700 shares per day over the past 30 days. BioMed Realty has a market cap of $4.7 billion and is part of the real estate industry. Shares are up 8.2% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

TheStreet Recommends

BioMed Realty

as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 26.5% when compared to the same quarter one year prior, rising from $18.64 million to $23.58 million.
  • BMR, with its decline in revenue, underperformed when compared the industry average of 9.8%. Since the same quarter one year prior, revenues slightly dropped by 7.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for BIOMED REALTY TRUST INC is currently extremely low, coming in at 4.11%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 14.91% significantly trails the industry average.
  • Net operating cash flow has decreased to $55.49 million or 23.60% 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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Textainer Group Holdings

Dividend Yield: 10.20%

Textainer Group Holdings

(NYSE:

TGH

) shares currently have a dividend yield of 10.20%.

Textainer Group Holdings Limited, together with its subsidiaries, engages in the purchase, ownership, management, leasing, and disposal of a fleet of intermodal containers worldwide. It operates through three segments: Container Ownership, Container Management, and Container Resale. The company has a P/E ratio of 6.10.

The average volume for Textainer Group Holdings has been 526,800 shares per day over the past 30 days. Textainer Group Holdings has a market cap of $1.1 billion and is part of the diversified services industry. Shares are down 41.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Textainer Group Holdings

as a

hold

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

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 Trading Companies & Distributors industry. The net income increased by 21.9% when compared to the same quarter one year prior, going from $33.01 million to $40.26 million.
  • The gross profit margin for TEXTAINER GROUP HOLDINGS LTD is currently very high, coming in at 88.12%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 29.13% significantly outperformed against the industry average.
  • Net operating cash flow has slightly increased to $88.21 million or 4.85% when compared to the same quarter last year. Despite an increase in cash flow, TEXTAINER GROUP HOLDINGS LTD's average is still marginally south of the industry average growth rate of 5.56%.
  • 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 Trading Companies & Distributors industry and the overall market on the basis of return on equity, TEXTAINER GROUP HOLDINGS LTD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • TGH'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 38.23%, 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. 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.

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