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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."

One Liberty Properties

Dividend Yield: 7.40%

One Liberty Properties

(NYSE:

OLP

) shares currently have a dividend yield of 7.40%.

One Liberty Properties, Inc., a real estate investment trust (REIT), engages in the acquisition, ownership, and management of commercial real estate properties in the United States. The company has a P/E ratio of 13.35.

The average volume for One Liberty Properties has been 35,700 shares per day over the past 30 days. One Liberty Properties has a market cap of $348.6 million and is part of the real estate industry. Shares are down 9.8% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

One Liberty Properties

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TheStreet Recommends

as a

buy

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

  • 49.82% is the gross profit margin for ONE LIBERTY PROPERTIES INC which we consider to be strong. Regardless of OLP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OLP's net profit margin of 23.49% is significantly lower than the industry average.
  • OLP, with its decline in revenue, underperformed when compared the industry average of 9.7%. Since the same quarter one year prior, revenues slightly dropped by 0.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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, ONE LIBERTY PROPERTIES INC's return on equity is below that of both the industry average and the S&P 500.
  • After a year of stock price fluctuations, the net result is that OLP'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, 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.

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Apollo Commercial Real Estate Finance

Dividend Yield: 10.90%

Apollo Commercial Real Estate Finance

(NYSE:

ARI

) shares currently have a dividend yield of 10.90%.

Apollo Commercial Real Estate Finance, Inc. The company has a P/E ratio of 8.96.

The average volume for Apollo Commercial Real Estate Finance has been 442,100 shares per day over the past 30 days. Apollo Commercial Real Estate Finance has a market cap of $942.5 million and is part of the real estate industry. Shares are down 0.3% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Apollo Commercial Real Estate Finance

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels, expanding profit margins, good cash flow from operations and increase in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • ARI's very impressive revenue growth greatly exceeded the industry average of 9.7%. Since the same quarter one year prior, revenues leaped by 55.4%. 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 APOLLO COMMERCIAL RE FIN INC is currently very high, coming in at 86.82%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 54.64% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $23.08 million or 46.80% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 16.09%.
  • APOLLO COMMERCIAL RE FIN INC's earnings per share declined by 23.5% 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, APOLLO COMMERCIAL RE FIN INC increased its bottom line by earning $1.73 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($1.85 versus $1.73).

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Highway Holdings

Dividend Yield: 7.10%

Highway Holdings

(NASDAQ:

HIHO

) shares currently have a dividend yield of 7.10%.

Highway Holdings Limited, through its subsidiaries, manufactures and sells metal, plastic, electric, and electronic components, subassemblies, and finished products for original equipment manufacturers (OEM) and contract manufacturers. The company has a P/E ratio of 35.38.

The average volume for Highway Holdings has been 25,700 shares per day over the past 30 days. Highway Holdings has a market cap of $21.5 million and is part of the industrial industry. Shares are up 88.2% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Highway Holdings

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and compelling growth in net income. 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 14.3%. Since the same quarter one year prior, revenues slightly increased by 5.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HIHO has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.98, which clearly demonstrates the ability to cover short-term cash needs.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 85.57% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HIHO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • HIGHWAY HOLDINGS LTD has improved earnings per share by 14.3% 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. During the past fiscal year, HIGHWAY HOLDINGS LTD increased its bottom line by earning $0.31 versus $0.16 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 18.0% when compared to the same quarter one year prior, going from $0.26 million to $0.30 million.

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