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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."

Collectors Universe

Dividend Yield: 8.60%

Collectors Universe

(NASDAQ:

CLCT

) shares currently have a dividend yield of 8.60%.

Collectors Universe Inc. provides third-party authentication, grading, and related services for rare and high-value collectibles consisting of coins, trading cards, sports memorabilia, and autographs. The company has a P/E ratio of 18.77.

The average volume for Collectors Universe has been 27,700 shares per day over the past 30 days. Collectors Universe has a market cap of $145.0 million and is part of the diversified services industry. Shares are down 24.8% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Collectors Universe

TheStreet Recommends

as a

buy

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity 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:

  • CLCT 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. To add to this, CLCT has a quick ratio of 1.56, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 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 Diversified Consumer Services industry and the overall market, COLLECTORS UNIVERSE INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for COLLECTORS UNIVERSE INC is rather high; currently it is at 60.99%. Regardless of CLCT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CLCT's net profit margin of 11.53% compares favorably to the industry average.
  • CLCT, with its decline in revenue, underperformed when compared the industry average of 11.2%. Since the same quarter one year prior, revenues slightly dropped by 7.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Diversified Consumer Services industry average, but is less than that of the S&P 500. The net income has significantly decreased by 25.8% when compared to the same quarter one year ago, falling from $2.39 million to $1.77 million.

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BlackRock Capital Investment

Dividend Yield: 9.20%

BlackRock Capital Investment

(NASDAQ:

BKCC

) shares currently have a dividend yield of 9.20%.

BlackRock Capital Investment Corporation, formerly known as BlackRock Kelso Capital Corporation, is a Business Development Company specializing in investments in middle market companies. The fund invests in all industries. The company has a P/E ratio of 6.40.

The average volume for BlackRock Capital Investment has been 318,700 shares per day over the past 30 days. BlackRock Capital Investment has a market cap of $683.3 million and is part of the financial services industry. Shares are up 11.2% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

BlackRock Capital Investment

as a

buy

. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins 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:

  • 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 Capital Markets industry and the overall market, BLACKROCK CAPITAL INVT CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for BLACKROCK CAPITAL INVT CORP is currently very high, coming in at 74.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 44.97% significantly outperformed against the industry average.
  • After a year of stock price fluctuations, the net result is that BKCC'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. 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.
  • BKCC, with its decline in revenue, slightly underperformed the industry average of 6.7%. Since the same quarter one year prior, revenues slightly dropped by 2.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • BLACKROCK CAPITAL INVT CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. 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, BLACKROCK CAPITAL INVT CORP increased its bottom line by earning $1.70 versus $1.20 in the prior year. For the next year, the market is expecting a contraction of 47.4% in earnings ($0.90 versus $1.70).

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Golub Capital BDC

Dividend Yield: 7.60%

Golub Capital BDC

(NASDAQ:

GBDC

) shares currently have a dividend yield of 7.60%.

Golub Capital BDC, Inc. is a business development company and operates as an externally managed closed-end non-diversified management investment company. It invests in debt and minority equity investments in middle-market companies that are, in most cases, sponsored by private equity investors. The company has a P/E ratio of 11.65.

The average volume for Golub Capital BDC has been 179,800 shares per day over the past 30 days. Golub Capital BDC has a market cap of $859.6 million and is part of the financial services industry. Shares are down 6.1% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Golub Capital BDC

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, expanding profit margins, solid stock price performance and growth in earnings per share. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • GBDC's revenue growth has slightly outpaced the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 8.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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 12.3% when compared to the same quarter one year prior, going from $16.28 million to $18.29 million.
  • The gross profit margin for GOLUB CAPITAL BDC INC is currently very high, coming in at 70.20%. Regardless of GBDC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GBDC's net profit margin of 60.13% significantly outperformed against the industry.
  • After a year of stock price fluctuations, the net result is that GBDC'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. 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.
  • GOLUB CAPITAL BDC INC'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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, GOLUB CAPITAL BDC INC increased its bottom line by earning $1.44 versus $1.36 in the prior year. For the next year, the market is expecting a contraction of 13.9% in earnings ($1.24 versus $1.44).

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