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."

TAL International Group

Dividend Yield: 13.50%

TAL International Group

(NYSE:

TAL

) shares currently have a dividend yield of 13.50%.

TAL International Group, Inc., together with its subsidiaries, leases intermodal transportation equipment and provides maritime container management services worldwide. The company operates in two segments, Equipment Leasing and Equipment Trading. The company has a P/E ratio of 4.84.

The average volume for TAL International Group has been 440,100 shares per day over the past 30 days. TAL International Group has a market cap of $446.2 million and is part of the diversified services industry. Shares are down 16% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

TAL International Group

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, 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 generally higher debt management risk.

Highlights from the ratings report include:

  • TAL's revenue growth has slightly outpaced the industry average of 4.8%. Since the same quarter one year prior, revenues slightly increased by 1.1%. 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 gross profit margin for TAL INTERNATIONAL GROUP INC is currently very high, coming in at 81.76%. Regardless of TAL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TAL's net profit margin of 7.93% compares favorably to the industry average.
  • The debt-to-equity ratio is very high at 4.84 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • Net operating cash flow has declined marginally to $88.25 million or 9.16% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, TAL INTERNATIONAL GROUP INC has marginally lower results.

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Medallion Financial

Dividend Yield: 10.20%

Medallion Financial

(NASDAQ:

TAXI

) shares currently have a dividend yield of 10.20%.

Medallion Financial Corp., through its subsidiaries, operates as a specialty finance company in the United States. The company engages in originating, acquiring, and servicing loans that finance taxicab medallions and various types of commercial businesses. The company has a P/E ratio of 7.63.

The average volume for Medallion Financial has been 159,300 shares per day over the past 30 days. Medallion Financial has a market cap of $237.9 million and is part of the financial services industry. Shares are up 38.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Medallion Financial

as a

hold

. The company's strengths can be seen in multiple areas, such as its expanding profit margins, solid stock price performance and notable return on equity. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:

  • The gross profit margin for MEDALLION FINANCIAL CORP is rather high; currently it is at 62.25%. It has increased significantly from the same period last year. Along with this, the net profit margin of 73.89% significantly outperformed against the industry average.
  • After a year of stock price fluctuations, the net result is that TAXI's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • TAXI, with its decline in revenue, underperformed when compared the industry average of 1.9%. Since the same quarter one year prior, revenues fell by 13.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Capital Markets industry average, but is less than that of the S&P 500. The net income has decreased by 15.0% when compared to the same quarter one year ago, dropping from $8.13 million to $6.91 million.
  • MEDALLION FINANCIAL CORP's earnings per share declined by 12.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MEDALLION FINANCIAL CORP increased its bottom line by earning $1.20 versus $1.14 in the prior year. For the next year, the market is expecting a contraction of 5.4% in earnings ($1.14 versus $1.20).

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Investors Real Estate

Dividend Yield: 7.50%

Investors Real Estate

(NYSE:

IRET

) shares currently have a dividend yield of 7.50%.

Investors Real Estate Trust is a real estate investment trust. The trust invests in real estate markets of United States. It is primarily engaged in investment and operation of the the real estate assets. The company has a P/E ratio of 50.93.

The average volume for Investors Real Estate has been 591,800 shares per day over the past 30 days. Investors Real Estate has a market cap of $842.5 million and is part of the real estate industry. Shares are up 0.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Investors Real Estate

as a

hold

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

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 Real Estate Investment Trusts (REITs) industry. The net income increased by 225.9% when compared to the same quarter one year prior, rising from $5.11 million to $16.67 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.9%. Since the same quarter one year prior, revenues slightly increased by 2.1%. 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.
  • INVESTORS REAL ESTATE TRUST 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. 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, INVESTORS REAL ESTATE TRUST turned its bottom line around by earning $0.11 versus -$0.28 in the prior year. This year, the market expects an improvement in earnings ($0.18 versus $0.11).
  • Net operating cash flow has significantly decreased to $9.54 million or 66.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of INVESTORS REAL ESTATE TRUST has not done very well: it is down 9.24% 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. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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