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."

Blackstone Group

Dividend Yield: 4.20%

Blackstone Group

(NYSE:

BX

) shares currently have a dividend yield of 4.20%.

The Blackstone Group L.P. is a publicly owned investment manager. The firm also provides financial advisory services to its clients. It provides its services to public and corporate pension funds, academic, cultural, and charitable organizations. The company has a P/E ratio of 15.49.

The average volume for Blackstone Group has been 4,227,200 shares per day over the past 30 days. Blackstone Group has a market cap of $31.8 billion and is part of the financial services industry. Shares are down 9.4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Blackstone Group

as a

buy

. Among the primary strengths of the company is its expanding profit margins over time. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • 40.20% is the gross profit margin for BLACKSTONE GROUP LP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, BX's net profit margin of 16.09% compares favorably to the industry average.
  • BLACKSTONE GROUP LP 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 suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, BLACKSTONE GROUP LP reported lower earnings of $1.04 versus $2.59 in the prior year. This year, the market expects an improvement in earnings ($2.40 versus $1.04).
  • BX, with its very weak revenue results, has greatly underperformed against the industry average of 24.3%. Since the same quarter one year prior, revenues plummeted by 62.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has significantly decreased to $208.53 million or 67.18% when compared to the same quarter last year. Despite a decrease in cash flow of 67.18%, BLACKSTONE GROUP LP is still significantly exceeding the industry average of -183.28%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 42.11%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 77.00% compared to the year-earlier quarter. Despite the heavy decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.

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Piedmont Office Realty

Dividend Yield: 4.30%

Piedmont Office Realty

(NYSE:

PDM

) shares currently have a dividend yield of 4.30%.

Piedmont Office Realty Trust, Inc. engages in the acquisition and ownership of commercial real estate properties in the United States. Its property portfolio primarily consists of office and industrial buildings, warehouses, and manufacturing facilities. The company has a P/E ratio of 18.10.

The average volume for Piedmont Office Realty has been 704,500 shares per day over the past 30 days. Piedmont Office Realty has a market cap of $2.9 billion and is part of the real estate industry. Shares are up 4.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Piedmont Office Realty

as a

buy

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Net operating cash flow has increased to $49.71 million or 13.93% when compared to the same quarter last year. In addition, PIEDMONT OFFICE REALTY TRUST has also modestly surpassed the industry average cash flow growth rate of 11.09%.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • PIEDMONT OFFICE REALTY TRUST's earnings per share declined by 41.7% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, PIEDMONT OFFICE REALTY TRUST increased its bottom line by earning $1.16 versus $0.27 in the prior year.
  • PDM, with its decline in revenue, underperformed when compared the industry average of 11.9%. Since the same quarter one year prior, revenues slightly dropped by 7.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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Southern

Dividend Yield: 4.60%

Southern

(NYSE:

SO

) shares currently have a dividend yield of 4.60%.

The Southern Company, together with its subsidiaries, engages in the generation, transmission, and distribution of electricity through coal, nuclear, oil and gas, and hydro resources in the states of Alabama, Georgia, Florida, and Mississippi. The company has a P/E ratio of 18.86.

The average volume for Southern has been 4,946,400 shares per day over the past 30 days. Southern has a market cap of $44.6 billion and is part of the utilities industry. Shares are up 5.2% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Southern

as a

buy

. The company's strengths can be seen in multiple areas, such as its expanding profit margins, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • 38.59% is the gross profit margin for SOUTHERN CO which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.50% is above that of 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 Electric Utilities industry and the overall market on the basis of return on equity, SOUTHERN CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • SOUTHERN CO's earnings per share declined by 5.3% 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, SOUTHERN CO increased its bottom line by earning $2.60 versus $2.18 in the prior year. This year, the market expects an improvement in earnings ($2.85 versus $2.60).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.8%. Since the same quarter one year prior, revenues slightly dropped by 5.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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