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 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."

Dorchester Minerals

Dividend Yield: 8.00%

Dorchester Minerals

(NASDAQ:

DMLP

) shares currently have a dividend yield of 8.00%.

Dorchester Minerals, L.P. is engaged in the acquisition, ownership, and administration of producing and nonproducing crude oil and natural gas royalty, net profits, and leasehold interests in the United States. The company has a P/E ratio of 17.13.

The average volume for Dorchester Minerals has been 57,600 shares per day over the past 30 days. Dorchester Minerals has a market cap of $746.0 million and is part of the financial services industry. Shares are down 6.2% year-to-date as of the close of trading on Thursday.

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

TheStreet Ratings rates

Dorchester Minerals

as a

buy

.

Highlights from the ratings report include:

  • DORCHESTER MINERALS -LP's earnings per share declined by 34.1% 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, DORCHESTER MINERALS -LP increased its bottom line by earning $1.42 versus $1.37 in the prior year.
  • DMLP, with its decline in revenue, slightly underperformed the industry average of 20.1%. Since the same quarter one year prior, revenues fell by 25.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • In its most recent trading session, DMLP has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 33.8% when compared to the same quarter one year ago, falling from $13.15 million to $8.70 million.

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

Educational Development

Dividend Yield: 7.20%

Educational Development

(NASDAQ:

EDUC

) shares currently have a dividend yield of 7.20%.

Educational Development Corporation operates as a trade publisher of the line of educational children's books in the United States. The company has a P/E ratio of 40.45.

The average volume for Educational Development has been 9,800 shares per day over the past 30 days. Educational Development has a market cap of $17.9 million and is part of the media industry. Shares are down 10.8% year-to-date as of the close of trading on Wednesday.

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

TheStreet Ratings rates

Educational Development

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 14.7%. Since the same quarter one year prior, revenues rose by 28.6%. 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.
  • The gross profit margin for EDUCATIONAL DEVELOPMENT CORP is rather high; currently it is at 62.37%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 4.80% is above that of the industry average.
  • Net operating cash flow has significantly increased by 62.49% to $2.10 million when compared to the same quarter last year. In addition, EDUCATIONAL DEVELOPMENT CORP has also vastly surpassed the industry average cash flow growth rate of -1.55%.
  • EDUC's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.81 is somewhat weak and could be cause for future problems.
  • 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 Distributors industry and the overall market, EDUCATIONAL DEVELOPMENT CORP's return on equity significantly trails that of both the industry average and 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.

Whitestone REIT

Dividend Yield: 7.30%

Whitestone REIT

(NYSE:

WSR

) shares currently have a dividend yield of 7.30%.

WhiteStone REIT is a Maryland REIT engaged in owning and operating commercial properties in culturally diverse markets in major metropolitan areas. The company has a P/E ratio of 60.46.

The average volume for Whitestone REIT has been 88,100 shares per day over the past 30 days. Whitestone REIT has a market cap of $358.9 million and is part of the real estate industry. Shares are up 5% year-to-date as of the close of trading on Thursday.

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

TheStreet Ratings rates

Whitestone REIT

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 increase in stock price during the past year. We feel these 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 0.3%. Since the same quarter one year prior, revenues rose by 16.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • WHITESTONE 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. We feel that this trend should continue. During the past fiscal year, WHITESTONE REIT increased its bottom line by earning $0.21 versus $0.04 in the prior year. This year, the market expects an improvement in earnings ($0.23 versus $0.21).
  • 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 79.6% when compared to the same quarter one year prior, rising from $0.61 million to $1.10 million.
  • Net operating cash flow has increased to $7.64 million or 18.45% when compared to the same quarter last year. In addition, WHITESTONE REIT has also vastly surpassed the industry average cash flow growth rate of -71.43%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.

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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