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."

New York Community Bancorp

Dividend Yield: 6.10%

New York Community Bancorp

(NYSE:

NYCB

) shares currently have a dividend yield of 6.10%.

New York Community Bancorp, Inc. operates as a holding company for New York Community Bank and New York Commercial Bank that offer banking products and financial services in New York, New Jersey, Florida, Ohio, and Arizona. The company has a P/E ratio of 15.04.

The average volume for New York Community Bancorp has been 5,531,300 shares per day over the past 30 days. New York Community Bancorp has a market cap of $7.9 billion and is part of the banking industry. Shares are up 1.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

New York Community Bancorp

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 sub par growth in net income.

Highlights from the ratings report include:

  • The gross profit margin for NEW YORK CMNTY BANCORP INC is currently very high, coming in at 71.79%. 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 25.25% trails the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
  • Despite the weak revenue results, NYCB has outperformed against the industry average of 14.8%. Since the same quarter one year prior, revenues slightly dropped by 3.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • NEW YORK CMNTY BANCORP INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NEW YORK CMNTY BANCORP INC increased its bottom line by earning $1.10 versus $1.08 in the prior year. For the next year, the market is expecting a contraction of 1.8% in earnings ($1.08 versus $1.10).
  • 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 Thrifts & Mortgage Finance industry and the overall market, NEW YORK CMNTY BANCORP INC's return on equity is below that of both the industry average and the S&P 500.

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Healthcare Realty

Dividend Yield: 4.40%

Healthcare Realty

(NYSE:

HR

) shares currently have a dividend yield of 4.40%.

Healthcare Realty Trust Incorporated is an independent real estate investment trust. The firm invests in real estate markets of the United States. The company has a P/E ratio of 56.20.

The average volume for Healthcare Realty has been 867,400 shares per day over the past 30 days. Healthcare Realty has a market cap of $2.8 billion and is part of the real estate industry. Shares are up 1.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Healthcare Realty

as a

buy

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

Highlights from the ratings report include:

  • HEALTHCARE REALTY TRUST INC 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, HEALTHCARE REALTY TRUST INC turned its bottom line around by earning $0.34 versus -$0.16 in the prior year. This year, the market expects an improvement in earnings ($0.64 versus $0.34).
  • 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 588.5% when compared to the same quarter one year prior, rising from $3.99 million to $27.48 million.
  • 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 3.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has significantly increased by 72.16% to $45.52 million when compared to the same quarter last year. In addition, HEALTHCARE REALTY TRUST INC has also vastly surpassed the industry average cash flow growth rate of 9.44%.
  • After a year of stock price fluctuations, the net result is that HR'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. 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.

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Hawaiian Electric Industries

Dividend Yield: 4.40%

Hawaiian Electric Industries

(NYSE:

HE

) shares currently have a dividend yield of 4.40%.

Hawaiian Electric Industries, Inc., through its subsidiaries, engages in the electric utility and banking businesses primarily in the State of Hawaii. The company is involved in the production, purchase, transmission, distribution, and sale of electricity. The company has a P/E ratio of 19.84.

The average volume for Hawaiian Electric Industries has been 316,800 shares per day over the past 30 days. Hawaiian Electric Industries has a market cap of $3.0 billion and is part of the utilities industry. Shares are down 15.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Hawaiian Electric Industries

as a

buy

. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • 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 5.9% when compared to the same quarter one year prior, going from $48.28 million to $51.14 million.
  • HE, with its decline in revenue, underperformed when compared the industry average of 0.6%. Since the same quarter one year prior, revenues fell by 17.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Even though the current debt-to-equity ratio is 1.05, it is still below the industry average, suggesting that this level of debt is acceptable within the Electric Utilities industry.
  • HAWAIIAN ELECTRIC INDS's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, HAWAIIAN ELECTRIC INDS increased its bottom line by earning $1.64 versus $1.62 in the prior year. For the next year, the market is expecting a contraction of 0.5% in earnings ($1.63 versus $1.64).
  • The gross profit margin for HAWAIIAN ELECTRIC INDS is rather low; currently it is at 21.03%. Regardless of HE's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, HE's net profit margin of 7.13% is significantly lower than the industry average.

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