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."

RR Donnelley & Sons

Dividend Yield: 6.50%

RR Donnelley & Sons

(NASDAQ:

RRD

) shares currently have a dividend yield of 6.50%.

R.R. Donnelley & Sons Company enables organizations to communicate by creating, managing, producing, distributing, and processing content on behalf of its customers. The company operates through Publishing and Retail Services, Variable Print, Strategic Services, and International segments. The company has a P/E ratio of 22.64.

The average volume for RR Donnelley & Sons has been 1,643,100 shares per day over the past 30 days. RR Donnelley & Sons has a market cap of $3.3 billion and is part of the diversified services industry. Shares are up 10.7% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

RR Donnelley & Sons

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 and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • DONNELLEY (R R) & SONS CO 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, DONNELLEY (R R) & SONS CO increased its bottom line by earning $0.73 versus $0.58 in the prior year. This year, the market expects an improvement in earnings ($1.56 versus $0.73).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 264.1% when compared to the same quarter one year prior, rising from $19.50 million to $71.00 million.
  • 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 Commercial Services & Supplies industry and the overall market, DONNELLEY (R R) & SONS CO's return on equity exceeds that of both the industry average and the S&P 500.
  • RRD, with its decline in revenue, slightly underperformed the industry average of 2.0%. Since the same quarter one year prior, revenues slightly dropped by 4.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for DONNELLEY (R R) & SONS CO is rather low; currently it is at 22.13%. Regardless of RRD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.41% trails the industry average.

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Crown Castle International

Dividend Yield: 4.10%

Crown Castle International

(NYSE:

CCI

) shares currently have a dividend yield of 4.10%.

Crown Castle International Corp., together with its subsidiaries, owns, operates, and leases shared wireless infrastructure in the United States and Australia. The company has a P/E ratio of 59.71.

The average volume for Crown Castle International has been 2,565,700 shares per day over the past 30 days. Crown Castle International has a market cap of $28.6 billion and is part of the telecommunications industry. Shares are unchanged year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Crown Castle International

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, growth in earnings per share and solid stock price performance. 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 2.1%. 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 slightly increased to $501.49 million or 5.82% when compared to the same quarter last year. In addition, CROWN CASTLE INTL CORP has also modestly surpassed the industry average cash flow growth rate of 3.63%.
  • The gross profit margin for CROWN CASTLE INTL CORP is rather high; currently it is at 63.84%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CCI's net profit margin of 14.91% significantly trails the industry average.
  • CROWN CASTLE INTL CORP has improved earnings per share by 11.4% 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, CROWN CASTLE INTL CORP increased its bottom line by earning $1.44 versus $0.90 in the prior year. For the next year, the market is expecting a contraction of 16.0% in earnings ($1.21 versus $1.44).
  • 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, CROWN CASTLE INTL CORP's return on equity is below that of both the industry average and the S&P 500.

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Magellan Midstream Partners

Dividend Yield: 4.60%

Magellan Midstream Partners

(NYSE:

MMP

) shares currently have a dividend yield of 4.60%.

Magellan Midstream Partners, L.P. engages in the transportation, storage, and distribution of refined petroleum products and crude oil in the United States. It operates through Refined Products, Crude Oil, and Marine Storage segments. The company has a P/E ratio of 37.93.

The average volume for Magellan Midstream Partners has been 1,227,300 shares per day over the past 30 days. Magellan Midstream Partners has a market cap of $15.4 billion and is part of the energy industry. Shares are down 0.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Magellan Midstream Partners

as a

buy

. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

  • The gross profit margin for MAGELLAN MIDSTREAM PRTNRS LP is rather high; currently it is at 54.53%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 36.14% significantly outperformed against the industry average.
  • Despite the weak revenue results, MMP has outperformed against the industry average of 34.7%. Since the same quarter one year prior, revenues fell by 14.1%. 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 Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 17.8% when compared to the same quarter one year ago, dropping from $252.09 million to $207.12 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MAGELLAN MIDSTREAM PRTNRS LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $345.59 million or 12.28% when compared to the same quarter last year. Despite a decrease in cash flow MAGELLAN MIDSTREAM PRTNRS LP is still fairing well by exceeding its industry average cash flow growth rate of -39.36%.

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