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."

World Point Terminals

Dividend Yield: 8.50%

World Point Terminals

(NYSE:

WPT

) shares currently have a dividend yield of 8.50%.

World Point Terminals, LP owns, operates, develops, and acquires terminals and other assets for the storage of light refined products, heavy refined products, and crude oil in the East Coast, Gulf Coast, and Midwest regions of the United States. The company has a P/E ratio of 14.22.

The average volume for World Point Terminals has been 32,200 shares per day over the past 30 days. World Point Terminals has a market cap of $258.9 million and is part of the energy industry. Shares are down 33.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

World Point Terminals

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures 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 revenue growth greatly exceeded the industry average of 34.6%. Since the same quarter one year prior, revenues slightly increased by 9.0%. 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.
  • WPT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.03, which clearly demonstrates the ability to cover short-term cash needs.
  • WORLD POINT TERMINALS's earnings per share declined by 7.4% 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, WORLD POINT TERMINALS increased its bottom line by earning $0.98 versus $0.76 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $0.98).
  • 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 Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, WORLD POINT TERMINALS has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Looking at the price performance of WPT's shares over the past 12 months, there is not much good news to report: the stock is down 26.45%, 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. 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.

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Fifth Street Senior Floating Rate

Dividend Yield: 10.10%

Fifth Street Senior Floating Rate

(NASDAQ:

FSFR

) shares currently have a dividend yield of 10.10%.

Fifth Street Senior Floating Rate Corp. The company has a P/E ratio of 8.73.

The average volume for Fifth Street Senior Floating Rate has been 163,100 shares per day over the past 30 days. Fifth Street Senior Floating Rate has a market cap of $263.7 million and is part of the financial services industry. Shares are down 16.7% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Fifth Street Senior Floating Rate

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 a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:

  • FSFR's very impressive revenue growth greatly exceeded the industry average of 6.7%. Since the same quarter one year prior, revenues leaped by 256.4%. 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 FIFTH STREET SR FLTG RATE CP is currently very high, coming in at 76.62%. It has increased significantly from the same period last year. Along with this, the net profit margin of 15.61% is above that of the industry average.
  • When compared to other companies in the Capital Markets industry and the overall market, FIFTH STREET SR FLTG RATE CP's return on equity is below that of both the industry average and the S&P 500.
  • The share price of FIFTH STREET SR FLTG RATE CP has not done very well: it is down 24.05% 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. 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 -$15.47 million or 157.90% when compared to the same quarter last year. Despite a decrease in cash flow of 157.90%, FIFTH STREET SR FLTG RATE CP is still significantly exceeding the industry average of -422.77%.

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Manning & Napier

Dividend Yield: 8.60%

Manning & Napier

(NYSE:

MN

) shares currently have a dividend yield of 8.60%.

Manning & Napier, Inc. provides investment management products and services primarily in the United States. The company offers a range of investment solutions through separately managed accounts, mutual funds, and collective investment trust funds. The company has a P/E ratio of 6.56.

The average volume for Manning & Napier has been 127,900 shares per day over the past 30 days. Manning & Napier has a market cap of $110.2 million and is part of the financial services industry. Shares are down 48.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Manning & Napier

as a

hold

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. 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:

  • MANNING & NAPIER INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, MANNING & NAPIER INC increased its bottom line by earning $0.67 versus $0.20 in the prior year. This year, the market expects an improvement in earnings ($0.99 versus $0.67).
  • 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 401.1% when compared to the same quarter one year prior, rising from $0.70 million to $3.50 million.
  • 39.55% is the gross profit margin for MANNING & NAPIER INC which we consider to be strong. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, MN's net profit margin of 4.02% significantly trails the industry average.
  • Net operating cash flow has decreased to $44.75 million or 17.80% when compared to the same quarter last year. Despite a decrease in cash flow of 17.80%, MANNING & NAPIER INC is still significantly exceeding the industry average of -422.77%.
  • MN'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 53.69%, 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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