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."

Northern Tier Energy

Dividend Yield: 17.10%

Northern Tier Energy

(NYSE:

NTI

) shares currently have a dividend yield of 17.10%.

Northern Tier Energy LP, an independent downstream energy company, engages in refining, retail, and pipeline operations in the United States. It operates through two segments, Refining and Retail. The company has a P/E ratio of 6.29.

The average volume for Northern Tier Energy has been 725,000 shares per day over the past 30 days. Northern Tier Energy has a market cap of $2.3 billion and is part of the energy industry. Shares are up 16.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Northern Tier Energy

as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, notable return on equity and attractive valuation levels. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • NORTHERN TIER ENERGY LP has improved earnings per share by 6.7% 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, NORTHERN TIER ENERGY LP increased its bottom line by earning $2.60 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($4.08 versus $2.60).
  • 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 7.6% when compared to the same quarter one year prior, going from $96.20 million to $103.50 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, NORTHERN TIER ENERGY LP's return on equity significantly exceeds that of both the industry average and the S&P 500.

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EastGroup Properties

Dividend Yield: 4.40%

EastGroup Properties

(NYSE:

EGP

) shares currently have a dividend yield of 4.40%.

EastGroup Properties, Inc., a real estate investment trust (REIT), focuses on the development, acquisition, and operation of industrial properties in the United States. The company has a P/E ratio of 36.30.

The average volume for EastGroup Properties has been 162,600 shares per day over the past 30 days. EastGroup Properties has a market cap of $1.8 billion and is part of the real estate industry. Shares are down 12% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

EastGroup Properties

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, expanding profit margins, good cash flow from operations 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:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.1%. Since the same quarter one year prior, revenues slightly increased by 4.5%. 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.
  • 40.43% is the gross profit margin for EASTGROUP PROPERTIES which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 20.35% trails the industry average.
  • Net operating cash flow has slightly increased to $43.91 million or 6.62% when compared to the same quarter last year. Despite an increase in cash flow, EASTGROUP PROPERTIES's average is still marginally south of the industry average growth rate of 9.44%.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, EASTGROUP PROPERTIES's return on equity is below that of both the industry average and the S&P 500.

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BGC Partners

Dividend Yield: 6.00%

BGC Partners

(NASDAQ:

BGCP

) shares currently have a dividend yield of 6.00%.

BGC Partners, Inc. operates as a brokerage company in the United Kingdom, the United States, and internationally. It operates in two segments, Financial Services and Real Estate Services. The company has a P/E ratio of 55.29.

The average volume for BGC Partners has been 1,574,900 shares per day over the past 30 days. BGC Partners has a market cap of $2.0 billion and is part of the financial services industry. Shares are up 4.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

BGC Partners

as a

buy

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

Highlights from the ratings report include:

  • BGCP's very impressive revenue growth greatly exceeded the industry average of 5.8%. Since the same quarter one year prior, revenues leaped by 57.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 432.1% when compared to the same quarter one year prior, rising from $7.21 million to $38.37 million.
  • Net operating cash flow has significantly increased by 157.89% to $133.25 million when compared to the same quarter last year. Despite an increase in cash flow of 157.89%, BGC PARTNERS INC is still growing at a significantly lower rate than the industry average of 264.01%.
  • 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. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • BGC PARTNERS INC reported significant earnings per share improvement 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, BGC PARTNERS INC reported lower earnings of $0.02 versus $0.35 in the prior year. This year, the market expects an improvement in earnings ($0.74 versus $0.02).

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