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."

Stag Industrial

Dividend Yield: 7.90%

Stag Industrial

(NYSE:

STAG

) shares currently have a dividend yield of 7.90%.

STAG Industrial, Inc. is a real estate investment trust. The firm invests in the real estate markets of United States. It is engaged in investment and management of real estate assets. STAG Industrial, Inc. was founded on July 21, 2010 and is based in Boston, Massachusetts.

The average volume for Stag Industrial has been 578,000 shares per day over the past 30 days. Stag Industrial has a market cap of $1.2 billion and is part of the real estate industry. Shares are down 6.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Stag Industrial

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth and good cash flow from operations. 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 6.1%. Since the same quarter one year prior, revenues rose by 32.0%. 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 increased to $36.11 million or 41.14% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 9.44%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 27.76%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 175.00% 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.
  • 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, STAG INDUSTRIAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for STAG INDUSTRIAL INC is rather low; currently it is at 16.72%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -7.72% is significantly below that of the industry average.

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Intersil Corporation

Dividend Yield: 4.10%

Intersil Corporation

(NASDAQ:

ISIL

) shares currently have a dividend yield of 4.10%.

Intersil Corporation designs and develops power management and precision analog integrated circuits (ICs) for industrial and infrastructure, consumer, and computing markets. The company has a P/E ratio of 583.50.

The average volume for Intersil Corporation has been 776,500 shares per day over the past 30 days. Intersil Corporation has a market cap of $1.5 billion and is part of the electronics industry. Shares are down 10.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Intersil Corporation

as a

hold

. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:

  • INTERSIL CORP has improved earnings per share by 30.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, INTERSIL CORP increased its bottom line by earning $0.41 versus $0.03 in the prior year. This year, the market expects an improvement in earnings ($0.61 versus $0.41).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 22.3% when compared to the same quarter one year prior, going from $13.89 million to $16.98 million.
  • The gross profit margin for INTERSIL CORP is rather high; currently it is at 62.07%. 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 13.22% trails the industry average.
  • 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 Semiconductors & Semiconductor Equipment industry and the overall market, INTERSIL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • ISIL has underperformed the S&P 500 Index, declining 17.76% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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Stage Stores

Dividend Yield: 7.30%

Stage Stores

(NYSE:

SSI

) shares currently have a dividend yield of 7.30%.

Stage Stores, Inc. operates as a specialty department store retailer in small and mid-sized towns and communities in the United States. Its merchandise portfolio comprises moderately priced brand name and private label apparel, accessories, cosmetics, footwear, and home goods. The company has a P/E ratio of 9.94.

The average volume for Stage Stores has been 1,111,600 shares per day over the past 30 days. Stage Stores has a market cap of $252.1 million and is part of the retail industry. Shares are down 14.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Stage Stores

as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

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. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.08 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • SSI, with its decline in revenue, slightly underperformed the industry average of 4.5%. Since the same quarter one year prior, revenues slightly dropped by 3.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for STAGE STORES INC is currently lower than what is desirable, coming in at 26.48%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.89% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$43.94 million or 1820.36% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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