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

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 9.10.

The average volume for TICC Capital has been 317,300 shares per day over the past 30 days. TICC Capital has a market cap of $365.9 million and is part of the financial services industry. Shares are down 18.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

TICC Capital

as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and good cash flow from operations. 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:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 57.0% when compared to the same quarter one year prior, rising from $13.26 million to $20.82 million.
  • The gross profit margin for TICC CAPITAL CORP is currently very high, coming in at 79.32%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 95.75% significantly outperformed against the industry average.
  • TICC CAPITAL CORP has improved earnings per share by 39.1% in the most recent quarter compared to 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, 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 ($0.74 versus -$0.05).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, TICC CAPITAL CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • TICC'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 34.54%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

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Medley Capital

Dividend Yield: 14.00%

Medley Capital

(NYSE:

MCC

) shares currently have a dividend yield of 14.00%.

Medley Capital Corporation is a business development company. The fund seeks to invest in privately negotiated debt and equity securities of small and middle market companies. The company has a P/E ratio of 7.77.

The average volume for Medley Capital has been 286,400 shares per day over the past 30 days. Medley Capital has a market cap of $495.1 million and is part of the financial services industry. Shares are down 6.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Medley Capital

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 3.9%. Since the same quarter one year prior, revenues rose by 17.1%. 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.
  • Net operating cash flow has significantly increased by 119.53% to $25.12 million when compared to the same quarter last year. In addition, MEDLEY CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of 1.80%.
  • The gross profit margin for MEDLEY CAPITAL CORP is rather high; currently it is at 65.26%. Regardless of MCC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MCC's net profit margin of 32.04% significantly outperformed against the industry.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 32.31%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 28.57% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • 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 Capital Markets industry and the overall market on the basis of return on equity, MEDLEY CAPITAL CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.

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American Capital Mortgage Investment

Dividend Yield: 12.50%

American Capital Mortgage Investment

(NASDAQ:

MTGE

) shares currently have a dividend yield of 12.50%.

American Capital Mortgage Investment Corp. operates as a real estate investment trust (REIT) in the United States. The company has a P/E ratio of 5.93.

The average volume for American Capital Mortgage Investment has been 444,400 shares per day over the past 30 days. American Capital Mortgage Investment has a market cap of $816.7 million and is part of the real estate industry. Shares are down 14.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

American Capital Mortgage Investment

as a

hold

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

Highlights from the ratings report include:

  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, AMERICAN CAPITAL MTG INV CP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The gross profit margin for AMERICAN CAPITAL MTG INV CP is currently very high, coming in at 77.78%. Regardless of MTGE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MTGE's net profit margin of 30.64% compares favorably to 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 36.3% when compared to the same quarter one year ago, falling from $48.76 million to $31.06 million.
  • Net operating cash flow has decreased to $29.47 million or 27.66% 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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