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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."

Suburban Propane Partners

Dividend Yield: 9.70%

Suburban Propane Partners

(NYSE:

SPH

) shares currently have a dividend yield of 9.70%.

Suburban Propane Partners, L.P., through its subsidiaries, engages in the retail marketing and distribution of propane, fuel oil, and refined fuels. The company has a P/E ratio of 28.38.

The average volume for Suburban Propane Partners has been 166,900 shares per day over the past 30 days. Suburban Propane Partners has a market cap of $2.2 billion and is part of the utilities industry. Shares are down 15.7% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Suburban Propane Partners

TheStreet Recommends

as a

buy

. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and attractive valuation levels. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • 37.83% is the gross profit margin for SUBURBAN PROPANE PRTNRS -LP which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 22.79% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 678.57% to $126.33 million when compared to the same quarter last year. In addition, SUBURBAN PROPANE PRTNRS -LP has also vastly surpassed the industry average cash flow growth rate of 22.10%.
  • SUBURBAN PROPANE PRTNRS -LP's earnings per share declined by 8.9% 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, SUBURBAN PROPANE PRTNRS -LP increased its bottom line by earning $1.55 versus $1.44 in the prior year. This year, the market expects an improvement in earnings ($2.01 versus $1.55).
  • SPH, with its decline in revenue, underperformed when compared the industry average of 17.0%. Since the same quarter one year prior, revenues fell by 31.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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Highway Holdings

Dividend Yield: 11.60%

Highway Holdings

(NASDAQ:

HIHO

) shares currently have a dividend yield of 11.60%.

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 21.56.

The average volume for Highway Holdings has been 20,500 shares per day over the past 30 days. Highway Holdings has a market cap of $13.1 million and is part of the industrial industry. Shares are up 24.3% year-to-date as of the close of trading on Thursday.

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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, increase in stock price during the past year, 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 15.0%. 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.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
  • 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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Rose Rock Midstream

Dividend Yield: 7.10%

Rose Rock Midstream

(NYSE:

RRMS

) shares currently have a dividend yield of 7.10%.

Rose Rock Midstream, L.P. owns, operates, develops, and acquires a portfolio of midstream energy assets. The company gathers, transports, stores, distributes, and markets crude oil in Colorado, Kansas, Louisiana, Montana, New Mexico, North Dakota, Ohio, Oklahoma, Texas, and Wyoming. The company has a P/E ratio of 23.95.

The average volume for Rose Rock Midstream has been 119,500 shares per day over the past 30 days. Rose Rock Midstream has a market cap of $1.3 billion and is part of the energy industry. Shares are down 19.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Rose Rock Midstream

as a

buy

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income and notable return on equity. 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 significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 16.3% when compared to the same quarter one year prior, going from $12.55 million to $14.60 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, ROSE ROCK MIDSTREAM LP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Along with the very weak revenue results, RRMS underperformed when compared to the industry average of 37.8%. Since the same quarter one year prior, revenues plummeted by 54.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ROSE ROCK MIDSTREAM LP's earnings per share declined by 30.0% 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 year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, ROSE ROCK MIDSTREAM LP reported lower earnings of $1.52 versus $1.70 in the prior year. This year, the market expects an improvement in earnings ($2.15 versus $1.52).
  • The gross profit margin for ROSE ROCK MIDSTREAM LP is currently extremely low, coming in at 13.00%. Regardless of RRMS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, RRMS's net profit margin of 10.83% compares favorably to the industry average.

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