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 "Buy."

Prologis

Dividend Yield: 4.10%

Prologis

(NYSE:

PLD

) shares currently have a dividend yield of 4.10%.

Prologis Inc. is an independent equity real estate investment trust. It invests in the real estate markets across the globe. The firm engages in the ownership, development, management, and leasing of industrial distribution and retail properties. The company has a P/E ratio of 16.85.

The average volume for Prologis has been 2,898,500 shares per day over the past 30 days. Prologis has a market cap of $20.5 billion and is part of the real estate industry. Shares are down 12.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Prologis

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 39.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PROLOGIS 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. During the past fiscal year, PROLOGIS INC increased its bottom line by earning $1.18 versus $0.42 in the prior year. This year, the market expects an improvement in earnings ($1.55 versus $1.18).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 89.0% when compared to the same quarter one year prior, rising from $137.92 million to $260.65 million.
  • Net operating cash flow has significantly increased by 102.81% to $293.93 million when compared to the same quarter last year. In addition, PROLOGIS INC has also vastly surpassed the industry average cash flow growth rate of 9.39%.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, PROLOGIS INC's return on equity is below that of both the industry average and the S&P 500.

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Universal

Dividend Yield: 4.10%

Universal

(NYSE:

UVV

) shares currently have a dividend yield of 4.10%.

Universal Corporation operates as a leaf tobacco merchant and processor worldwide. It engages in procuring, financing, processing, packing, storing, and shipping leaf tobacco for sale to, or for the account of, manufacturers of consumer tobacco products. The company has a P/E ratio of 12.63.

The average volume for Universal has been 223,200 shares per day over the past 30 days. Universal has a market cap of $1.2 billion and is part of the tobacco industry. Shares are down 8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Universal

as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 68.75% and other important driving factors, this stock has surged by 33.01% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, UVV should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Tobacco industry. The net income increased by 49.5% when compared to the same quarter one year prior, rising from $15.03 million to $22.47 million.
  • The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.12, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 87.91% to -$28.87 million when compared to the same quarter last year. In addition, UNIVERSAL CORP/VA has also vastly surpassed the industry average cash flow growth rate of -5.73%.

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DHT Holdings

Dividend Yield: 12.70%

DHT Holdings

(NYSE:

DHT

) shares currently have a dividend yield of 12.70%.

DHT Holdings, Inc. operates crude oil tankers in Bermuda. As of March 10, 2015, its fleet consisted of 18 crude oil tankers, including 14 very large crude carriers, 2 Suezmax tankers, and 2 Aframax tankers. The company was incorporated in 2005 and is headquartered in Hamilton, Bermuda. The company has a P/E ratio of 10.11.

The average volume for DHT Holdings has been 1,856,600 shares per day over the past 30 days. DHT Holdings has a market cap of $526.5 million and is part of the transportation industry. Shares are down 29.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

DHT Holdings

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • DHT's very impressive revenue growth greatly exceeded the industry average of 36.8%. Since the same quarter one year prior, revenues leaped by 169.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • DHT HOLDINGS 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. During the past fiscal year, DHT HOLDINGS INC turned its bottom line around by earning $0.08 versus -$0.52 in the prior year. This year, the market expects an improvement in earnings ($1.12 versus $0.08).
  • 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 489.4% when compared to the same quarter one year prior, rising from -$7.05 million to $27.47 million.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, DHT HOLDINGS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for DHT HOLDINGS INC is rather high; currently it is at 64.54%. It has increased significantly from the same period last year. Along with this, the net profit margin of 29.86% significantly outperformed against the industry average.

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