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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."

Teekay LNG Partners

Dividend Yield: 10.70%

Teekay LNG Partners

(NYSE:

TGP

) shares currently have a dividend yield of 10.70%.

Teekay LNG Partners L.P. provides marine transportation services for liquefied natural gas (LNG), liquefied petroleum gas (LPG), and crude oil worldwide. The company has a P/E ratio of 10.52.

The average volume for Teekay LNG Partners has been 319,600 shares per day over the past 30 days. Teekay LNG Partners has a market cap of $2.1 billion and is part of the transportation industry. Shares are down 37.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Teekay LNG Partners

TheStreet Recommends

as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow 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 significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 33.1% when compared to the same quarter one year prior, rising from $43.65 million to $58.09 million.
  • The gross profit margin for TEEKAY LNG PARTNERS LP is currently very high, coming in at 75.18%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 58.91% 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 Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, TEEKAY LNG PARTNERS LP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The debt-to-equity ratio of 1.31 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.43, which clearly demonstrates the inability to cover short-term cash needs.
  • Net operating cash flow has decreased to $31.54 million or 40.62% 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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Costamare

Dividend Yield: 8.80%

Costamare

(NYSE:

CMRE

) shares currently have a dividend yield of 8.80%.

COSTAMARE INC. owns and charters containerships to liner companies worldwide. The company has a P/E ratio of 7.85.

The average volume for Costamare has been 146,500 shares per day over the past 30 days. Costamare has a market cap of $989.8 million and is part of the transportation industry. Shares are down 22.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Costamare

as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk 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 significantly exceeded that of the S&P 500 and the Marine industry. The net income increased by 61.9% when compared to the same quarter one year prior, rising from $27.38 million to $44.33 million.
  • The gross profit margin for COSTAMARE INC is currently very high, coming in at 71.96%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 35.97% 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 Marine industry and the overall market on the basis of return on equity, COSTAMARE INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • CMRE'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 43.19%, 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.
  • Currently the debt-to-equity ratio of 1.79 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, CMRE has a quick ratio of 0.65, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

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Rose Rock Midstream

Dividend Yield: 8.30%

Rose Rock Midstream

(NYSE:

RRMS

) shares currently have a dividend yield of 8.30%.

Rose Rock Midstream, L.P. owns, operates, develops, and acquires a portfolio of midstream energy assets. The company gathers, transports, stores, distributes, and markets crude oil in Colorado, Kansas, Louisiana, Montana, New Mexico, North Dakota, Ohio, Oklahoma, Texas, and Wyoming. The company has a P/E ratio of 21.73.

The average volume for Rose Rock Midstream has been 134,300 shares per day over the past 30 days. Rose Rock Midstream has a market cap of $1.2 billion and is part of the energy industry. Shares are down 31.2% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Rose Rock Midstream

as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, notable return on equity and reasonable valuation levels. 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 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 Oil, Gas & Consumable Fuels industry. The net income increased by 55.1% when compared to the same quarter one year prior, rising from $11.01 million to $17.07 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ROSE ROCK MIDSTREAM LP's return on equity exceeds that of both the industry average and the S&P 500.
  • Despite the weak revenue results, RRMS has outperformed against the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 23.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The debt-to-equity ratio is very high at 2.74 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, RRMS's quick ratio is somewhat strong at 1.09, demonstrating the ability to handle short-term liquidity needs.
  • Looking at the price performance of RRMS's shares over the past 12 months, there is not much good news to report: the stock is down 52.53%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, RRMS is still more expensive than most of the other companies in its industry.

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