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."

Washington REIT

Dividend Yield: 4.30%

Washington REIT

(NYSE:

WRE

) shares currently have a dividend yield of 4.30%.

Washington Real Estate Investment Trust is an equity real estate investment trust (REIT). The company engages in the ownership, operation, and development of real properties. The firm invests in real estate markets of the greater Washington D.C. metro region. The company has a P/E ratio of 21.52.

The average volume for Washington REIT has been 432,500 shares per day over the past 30 days. Washington REIT has a market cap of $1.9 billion and is part of the real estate industry. Shares are up 4.2% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Washington REIT

as a

buy

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

  • 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 2551.8% when compared to the same quarter one year prior, rising from $2.34 million to $62.13 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.9%. Since the same quarter one year prior, revenues slightly increased by 6.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 74.72% to $31.14 million when compared to the same quarter last year. In addition, WASHINGTON REIT has also vastly surpassed the industry average cash flow growth rate of 3.64%.
  • WASHINGTON REIT 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, WASHINGTON REIT increased its bottom line by earning $1.31 versus $0.06 in the prior year. For the next year, the market is expecting a contraction of 93.1% in earnings ($0.09 versus $1.31).

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Chesapeake Lodging

Dividend Yield: 6.40%

Chesapeake Lodging

(NYSE:

CHSP

) shares currently have a dividend yield of 6.40%.

Chesapeake Lodging Trust is a self-advised real estate investment trust organized in the state of Maryland in June 2009. The company focuses on investments primarily in upper-upscale hotels in major business and convention markets and premium select-service hotels in urban settings or unique locations in the United States. The company has a P/E ratio of 26.37.

The average volume for Chesapeake Lodging has been 484,100 shares per day over the past 30 days. Chesapeake Lodging has a market cap of $1.5 billion and is part of the real estate industry. Shares are down 0.5% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Chesapeake Lodging

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, reasonable valuation levels, good cash flow from operations and growth in earnings per share. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 7.9%. Since the same quarter one year prior, revenues rose by 18.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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 Real Estate Investment Trusts (REITs) industry. The net income increased by 66.7% when compared to the same quarter one year prior, rising from $8.84 million to $14.73 million.
  • Net operating cash flow has increased to $43.08 million or 26.91% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.64%.
  • CHESAPEAKE LODGING TRUST 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, CHESAPEAKE LODGING TRUST reported lower earnings of $0.97 versus $1.01 in the prior year. This year, the market expects an improvement in earnings ($1.30 versus $0.97).

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Healthcare Trust of America

Dividend Yield: 4.10%

Healthcare Trust of America

(NYSE:

HTA

) shares currently have a dividend yield of 4.10%.

Healthcare Trust of America is a fully integrated, self-administered and internally managed real estate investment trust, or REIT. The company acquires, owns and operates medical office buildings and other facilities that serve the healthcare industry. The company has a P/E ratio of 111.04.

The average volume for Healthcare Trust of America has been 1,012,900 shares per day over the past 30 days. Healthcare Trust of America has a market cap of $3.8 billion and is part of the real estate industry. Shares are up 6.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Healthcare Trust of America

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth and good cash flow from operations. 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 7.9%. Since the same quarter one year prior, revenues slightly increased by 5.8%. 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.
  • Net operating cash flow has increased to $52.44 million or 34.62% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.64%.
  • HEALTHCARE TRUST OF AMERICA 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, HEALTHCARE TRUST OF AMERICA reported lower earnings of $0.25 versus $0.37 in the prior year. This year, the market expects an improvement in earnings ($0.41 versus $0.25).
  • After a year of stock price fluctuations, the net result is that HTA's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the 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.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 51.0% when compared to the same quarter one year ago, falling from $21.19 million to $10.37 million.

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