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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

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: 7.20%

One Liberty Properties

(NYSE:

OLP

) shares currently have a dividend yield of 7.20%.

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 13.21.

The average volume for One Liberty Properties has been 32,800 shares per day over the past 30 days. One Liberty Properties has a market cap of $357.8 million and is part of the real estate industry. Shares are down 6.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

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TheStreet Recommends

One Liberty Properties

as a

buy

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, reasonable valuation levels, expanding profit margins and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

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 140.0% when compared to the same quarter one year prior, rising from $3.27 million to $7.86 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.6%. Since the same quarter one year prior, revenues slightly increased by 6.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 49.22% 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 50.76% significantly outperformed against the industry.
  • ONE LIBERTY PROPERTIES 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ONE LIBERTY PROPERTIES INC increased its bottom line by earning $1.36 versus $1.10 in the prior year. For the next year, the market is expecting a contraction of 8.8% in earnings ($1.24 versus $1.36).

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Triangle Capital Corporation

Dividend Yield: 9.40%

Triangle Capital Corporation

(NYSE:

TCAP

) shares currently have a dividend yield of 9.40%.

Triangle Capital Corporation is a business development company specializing in private equity and mezzanine investments. The company has a P/E ratio of 11.45.

The average volume for Triangle Capital Corporation has been 108,200 shares per day over the past 30 days. Triangle Capital Corporation has a market cap of $764.5 million and is part of the financial services industry. Shares are up 13.4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Triangle Capital Corporation

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. 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 revenue growth came in higher than the industry average of 5.9%. Since the same quarter one year prior, revenues rose by 28.0%. 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 significantly increased by 149.76% to $10.67 million when compared to the same quarter last year. Despite an increase in cash flow, TRIANGLE CAPITAL CORP's cash flow growth rate is still lower than the industry average growth rate of 188.71%.
  • The gross profit margin for TRIANGLE CAPITAL CORP is currently very high, coming in at 78.68%. Regardless of TCAP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TCAP's net profit margin of 27.14% compares favorably to the industry average.
  • TRIANGLE CAPITAL CORP's earnings per share declined by 44.4% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, TRIANGLE CAPITAL CORP reported lower earnings of $1.04 versus $2.94 in the prior year. This year, the market expects an improvement in earnings ($2.12 versus $1.04).
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Capital Markets industry average. The net income has significantly decreased by 33.2% when compared to the same quarter one year ago, falling from $12.50 million to $8.35 million.

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Gladstone Capital

Dividend Yield: 10.50%

Gladstone Capital

(NASDAQ:

GLAD

) shares currently have a dividend yield of 10.50%.

Gladstone Capital Corporation is a business development company specializing in investments in debt and equity securities. The company has a P/E ratio of 15.11.

The average volume for Gladstone Capital has been 78,700 shares per day over the past 30 days. Gladstone Capital has a market cap of $169.3 million and is part of the financial services industry. Shares are down 2.2% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Gladstone Capital

as a

buy

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

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 Capital Markets industry. The net income increased by 553.9% when compared to the same quarter one year prior, rising from -$2.10 million to $9.54 million.
  • The gross profit margin for GLADSTONE CAPITAL CORP is rather high; currently it is at 65.58%. Regardless of GLAD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GLAD's net profit margin of 103.45% significantly outperformed against the industry.
  • GLADSTONE CAPITAL CORP 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, GLADSTONE CAPITAL CORP reported lower earnings of $0.53 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($0.84 versus $0.53).
  • GLAD, with its decline in revenue, slightly underperformed the industry average of 5.9%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • GLAD has underperformed the S&P 500 Index, declining 20.42% from its price level of one year ago. 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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