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."

TICC Capital

Dividend Yield: 19.00%

TICC Capital

(NASDAQ:

TICC

) shares currently have a dividend yield of 19.00%.

TICC Capital Corp., a business development company, operates as a closed-end, non-diversified management investment company. The firm invests in both public and private companies. The company has a P/E ratio of 9.12.

The average volume for TICC Capital has been 384,400 shares per day over the past 30 days. TICC Capital has a market cap of $366.5 million and is part of the financial services industry. Shares are up 0.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

TICC Capital

as a

hold

. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • TICC, with its decline in revenue, underperformed when compared the industry average of 5.7%. Since the same quarter one year prior, revenues fell by 23.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for TICC CAPITAL CORP is rather high; currently it is at 68.76%. Regardless of TICC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TICC's net profit margin of -128.52% significantly underperformed when compared to the industry average.
  • TICC CAPITAL CORP 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TICC CAPITAL CORP swung to a loss, reporting -$0.05 versus $1.11 in the prior year. This year, the market expects an improvement in earnings ($0.73 versus -$0.05).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 2256.1% when compared to the same quarter one year ago, falling from -$1.26 million to -$29.73 million.
  • 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. Compared to other companies in the Capital Markets industry and the overall market, TICC CAPITAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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Evolving Systems

Dividend Yield: 7.80%

Evolving Systems

(NASDAQ:

EVOL

) shares currently have a dividend yield of 7.80%.

Evolving Systems, Inc. provides software solutions and services to the wireless, wireline, and cable markets in the United Kingdom, Nigeria, Mexico, and internationally. The company has a P/E ratio of 17.12.

The average volume for Evolving Systems has been 60,200 shares per day over the past 30 days. Evolving Systems has a market cap of $66.1 million and is part of the computer software & services industry. Shares are up 1.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Evolving Systems

as a

hold

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

Highlights from the ratings report include:

  • Net operating cash flow has slightly increased to -$0.24 million or 5.42% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -8.40%.
  • Despite currently having a low debt-to-equity ratio of 0.31, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that EVOL's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.84 is high and demonstrates strong liquidity.
  • 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 Software industry and the overall market on the basis of return on equity, EVOLVING SYSTEMS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 66.0% when compared to the same quarter one year ago, falling from $1.68 million to $0.57 million.

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Hercules Technology Growth Capital

Dividend Yield: 10.10%

Hercules Technology Growth Capital

(NYSE:

HTGC

) shares currently have a dividend yield of 10.10%.

Hercules Technology Growth Capital, Inc. The company has a P/E ratio of 10.36.

The average volume for Hercules Technology Growth Capital has been 360,800 shares per day over the past 30 days. Hercules Technology Growth Capital has a market cap of $881.4 million and is part of the real estate industry. Shares are up 1.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Hercules Technology Growth Capital

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations 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 disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 5.7%. Since the same quarter one year prior, revenues rose by 27.3%. 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 significantly increased by 683.09% to $101.86 million when compared to the same quarter last year. In addition, HERCULES TECH GROWTH CAP INC has also vastly surpassed the industry average cash flow growth rate of 272.65%.
  • The gross profit margin for HERCULES TECH GROWTH CAP INC is currently very high, coming in at 78.47%. Regardless of HTGC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.64% trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 73.1% when compared to the same quarter one year ago, falling from $15.18 million to $4.08 million.
  • 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. When compared to other companies in the Capital Markets industry and the overall market, HERCULES TECH GROWTH CAP INC's return on equity is below that of both the industry average and the S&P 500.

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