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 or Stephanie Link.

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 and 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."

Integrys Energy Group

Dividend Yield: 4.80%

Integrys Energy Group

(NYSE:

TEG

) shares currently have a dividend yield of 4.80%.

Integrys Energy Group, Inc. operates as a diversified energy holding company with regulated natural gas and electric utility operations in Illinois, Michigan, Minnesota, and Wisconsin. The company has a P/E ratio of 13.07.

The average volume for Integrys Energy Group has been 428,900 shares per day over the past 30 days. Integrys Energy Group has a market cap of $4.5 billion and is part of the utilities industry. Shares are up 5.3% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates

Integrys Energy Group

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels, good cash flow from operations, compelling growth in net income and notable return on equity. We feel these 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:

  • The revenue growth greatly exceeded the industry average of 32.4%. Since the same quarter one year prior, revenues rose by 42.9%. 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 Multi-Utilities industry. The net income increased by 92.4% when compared to the same quarter one year prior, rising from $68.80 million to $132.40 million.
  • Net operating cash flow has significantly increased by 79.26% to $44.10 million when compared to the same quarter last year. In addition, INTEGRYS ENERGY GROUP INC has also vastly surpassed the industry average cash flow growth rate of -48.32%.
  • 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 Multi-Utilities industry and the overall market on the basis of return on equity, INTEGRYS ENERGY GROUP INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Duke Energy Corporation

Dividend Yield: 4.40%

Duke Energy Corporation

(NYSE:

DUK

) shares currently have a dividend yield of 4.40%.

Duke Energy Corporation operates as an energy company in the United States and Latin America. The company operates in three segments: U.S. Franchised Electric and Gas, Commercial Power, and International Energy. The U.S. The company has a P/E ratio of 21.02.

The average volume for Duke Energy Corporation has been 3,039,300 shares per day over the past 30 days. Duke Energy Corporation has a market cap of $49.7 billion and is part of the utilities industry. Shares are up 2.7% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates

Duke Energy Corporation

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • DUK's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 7.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • DUKE ENERGY CORP 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 year. We feel that this trend should continue. During the past fiscal year, DUKE ENERGY CORP increased its bottom line by earning $3.73 versus $3.06 in the prior year. This year, the market expects an improvement in earnings ($4.55 versus $3.73).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Electric Utilities industry average. The net income increased by 58.2% when compared to the same quarter one year prior, rising from $435.00 million to $688.00 million.
  • Net operating cash flow has slightly increased to $1,378.00 million or 8.93% when compared to the same quarter last year. Despite an increase in cash flow, DUKE ENERGY CORP's cash flow growth rate is still lower than the industry average growth rate of 25.33%.
  • The debt-to-equity ratio is somewhat low, currently at 0.99, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that DUK's debt-to-equity ratio is low, the quick ratio, which is currently 0.53, displays a potential problem in covering short-term cash needs.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Covanta Holding Corporation

Dividend Yield: 4.20%

Covanta Holding Corporation

(NYSE:

CVA

) shares currently have a dividend yield of 4.20%.

Covanta Holding Corporation, through its subsidiaries, provides waste and energy services to municipal entities primarily in North America. The company has a P/E ratio of 49.46.

The average volume for Covanta Holding Corporation has been 1,624,800 shares per day over the past 30 days. Covanta Holding Corporation has a market cap of $2.3 billion and is part of the materials & construction industry. Shares are up 1.4% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates

Covanta Holding Corporation

as a

buy

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and expanding profit margins. We feel these 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:

  • 38.39% is the gross profit margin for COVANTA HOLDING CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 6.63% is above that of the industry average.
  • COVANTA HOLDING CORP 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 year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, COVANTA HOLDING CORP reported lower earnings of $0.35 versus $0.87 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus $0.35).
  • CVA, with its decline in revenue, slightly underperformed the industry average of 7.2%. Since the same quarter one year prior, revenues slightly dropped by 1.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Commercial Services & Supplies industry average, but is less than that of the S&P 500. The net income has significantly decreased by 65.8% when compared to the same quarter one year ago, falling from $82.00 million to $28.00 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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