Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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."

THL Credit

Dividend Yield: 10.20%

THL Credit

(NASDAQ:

TCRD

) shares currently have a dividend yield of 10.20%.

THL Credit, Inc. is a business development company specializing in direct and fund of fund investments. The fund seeks to invest in debt and equity securities of middle market companies. The company has a P/E ratio of 12.06.

The average volume for THL Credit has been 343,600 shares per day over the past 30 days. THL Credit has a market cap of $449.9 million and is part of the financial services industry. Shares are down 19.5% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

THL Credit

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income 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:

  • The revenue growth greatly exceeded the industry average of 2.6%. Since the same quarter one year prior, revenues rose by 44.9%. 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 THL CREDIT INC is rather high; currently it is at 65.35%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 52.55% significantly outperformed against the industry average.
  • 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 on the basis of return on equity, THL CREDIT INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, TCRD has underperformed the S&P 500 Index, declining 13.94% 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 significantly decreased to -$83.40 million or 146.63% 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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Town Sports International Holdings

Dividend Yield: 15.50%

Town Sports International Holdings

(NASDAQ:

CLUB

) shares currently have a dividend yield of 15.50%.

Town Sports International Holdings, Inc., together with its subsidiaries, owns and operates fitness clubs in the Northeast and Mid-Atlantic regions of the United States.

The average volume for Town Sports International Holdings has been 297,600 shares per day over the past 30 days. Town Sports International Holdings has a market cap of $100.3 million and is part of the leisure industry. Shares are down 72% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Town Sports International Holdings

as a

hold

. The company's strongest point has been its expanding profit margins. At the same time, however, we also find weaknesses including deteriorating net income, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.8%. Since the same quarter one year prior, revenues slightly dropped by 2.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 67.18%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 183.33% 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.
  • TOWN SPORTS INTL HOLDINGS 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. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, TOWN SPORTS INTL HOLDINGS's EPS of $0.50 remained unchanged from the prior years' EPS of $0.50. For the next year, the market is expecting a contraction of 140.0% in earnings (-$0.20 versus $0.50).
  • The gross profit margin for TOWN SPORTS INTL HOLDINGS is rather low; currently it is at 18.75%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.03% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $14.40 million or 33.85% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, TOWN SPORTS INTL HOLDINGS has marginally lower results.

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BDCA Venture

Dividend Yield: 7.10%

BDCA Venture

(NASDAQ:

BDCV

) shares currently have a dividend yield of 7.10%.

Keating Capital, Inc. is a business development company specializing in later stage, emerging growth, growth capital, pre-IPO and secondary purchase investments. It seeks to invest in micro-cap and small-cap private companies that are committed to and capable of becoming public. The company has a P/E ratio of 15.72.

The average volume for BDCA Venture has been 16,400 shares per day over the past 30 days. BDCA Venture has a market cap of $55.4 million and is part of the financial services industry. Shares are down 8% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

BDCA Venture

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income 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 and weak operating cash flow.

Highlights from the ratings report include:

  • BDCV's very impressive revenue growth greatly exceeded the industry average of 2.6%. Since the same quarter one year prior, revenues leaped by 2600.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BDCA VENTURE INC has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. 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, BDCA VENTURE INC turned its bottom line around by earning $0.26 versus -$0.21 in the prior year. This year, the market expects an improvement in earnings ($0.30 versus $0.26).
  • Net operating cash flow has significantly decreased to -$5.05 million or 568.51% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • This stock has managed to decline in share value by 4.88% over the past twelve months. 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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