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."

Education Realty

Dividend Yield: 4.10%

Education Realty

(NYSE:

EDR

) shares currently have a dividend yield of 4.10%.

EdR is a real estate investment trust. The firm invests in the real estate markets of United States. It invests collegiate housing communities. The firm develops, acquires, owns, and manages collegiate housing communities located near university campuses. The company has a P/E ratio of 32.06.

The average volume for Education Realty has been 544,400 shares per day over the past 30 days. Education Realty has a market cap of $1.7 billion and is part of the real estate industry. Shares are down 3.1% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Education Realty

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, reasonable valuation levels, good cash flow from operations and compelling growth in net income. We feel these 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 9.9%. Since the same quarter one year prior, revenues rose by 20.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • 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 1262.3% when compared to the same quarter one year prior, rising from $1.64 million to $22.40 million.
  • Net operating cash flow has increased to $17.94 million or 29.71% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 12.61%.

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Williams Companies

Dividend Yield: 4.60%

Williams Companies

(NYSE:

WMB

) shares currently have a dividend yield of 4.60%.

The Williams Companies, Inc. operates as an energy infrastructure company primarily in the United States. The company operates in three segments: Williams Partners, Access Midstream, and Williams NGL & Petchem Services. The company has a P/E ratio of 62.88.

The average volume for Williams Companies has been 7,320,200 shares per day over the past 30 days. Williams Companies has a market cap of $37.6 billion and is part of the energy industry. Shares are up 11.9% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Williams Companies

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, expanding profit margins, good cash flow from operations and compelling growth in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 19.8%. Since the same quarter one year prior, revenues rose by 29.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • 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 1478.6% when compared to the same quarter one year prior, rising from -$14.00 million to $193.00 million.
  • 44.42% is the gross profit margin for WILLIAMS COS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.01% is above that of the industry average.
  • Net operating cash flow has significantly increased by 96.31% to $1,011.00 million when compared to the same quarter last year. In addition, WILLIAMS COS INC has also vastly surpassed the industry average cash flow growth rate of -13.07%.

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Hospitality Properties

Dividend Yield: 5.90%

Hospitality Properties

(NYSE:

HPT

) shares currently have a dividend yield of 5.90%.

Hospitality Properties Trust, a real estate investment trust (REIT), engages in buying, owning, and leasing hotels. The company has a P/E ratio of 28.36.

The average volume for Hospitality Properties has been 870,200 shares per day over the past 30 days. Hospitality Properties has a market cap of $5.0 billion and is part of the real estate industry. Shares are up 9.9% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Hospitality Properties

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • HPT's revenue growth has slightly outpaced the industry average of 9.9%. Since the same quarter one year prior, revenues rose by 11.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • HOSPITALITY PROPERTIES TRUST 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. We feel that this trend should continue. During the past fiscal year, HOSPITALITY PROPERTIES TRUST increased its bottom line by earning $1.18 versus $0.73 in the prior year. This year, the market expects an improvement in earnings ($1.42 versus $1.18).
  • 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 72.6% when compared to the same quarter one year prior, rising from $32.75 million to $56.52 million.

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