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 or Stephanie Link.

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."

Mesa Royalty

Dividend Yield: 8.30%

Mesa Royalty

(NYSE:

MTR

) shares currently have a dividend yield of 8.30%.

Mesa Royalty Trust holds net overriding royalty interests in various oil and gas properties in the United States. It has interests in properties located in the Hugoton field of Kansas; the San Juan Basin field of New Mexico and Colorado; and the Yellow Creek field of Wyoming. The company has a P/E ratio of 6.88.

The average volume for Mesa Royalty has been 10,500 shares per day over the past 30 days. Mesa Royalty has a market cap of $43.9 million and is part of the financial services industry. Shares are down 8.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Mesa Royalty

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, compelling growth in net income and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • MTR's very impressive revenue growth greatly exceeded the industry average of 21.4%. Since the same quarter one year prior, revenues leaped by 97.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MTR 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 3.32, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MESA ROYALTY TRUST's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 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 100.7% when compared to the same quarter one year prior, rising from $0.88 million to $1.77 million.
  • The gross profit margin for MESA ROYALTY TRUST is currently very high, coming in at 100.00%. MTR has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, MTR's net profit margin of 97.95% significantly outperformed against the industry.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

KCAP Financial

Dividend Yield: 14.20%

KCAP Financial

(NASDAQ:

KCAP

) shares currently have a dividend yield of 14.20%.

KCAP Financial, Inc. is a private equity and venture capital firm specializing in mid market, buyouts, and mezzanine investments. It focuses on mature and middle market companies. The company has a P/E ratio of 9.78.

The average volume for KCAP Financial has been 213,400 shares per day over the past 30 days. KCAP Financial has a market cap of $258.7 million and is part of the financial services industry. Shares are up 2.9% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates

TheStreet Recommends

KCAP Financial

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 13.4%. Since the same quarter one year prior, revenues slightly increased by 8.2%. Growth in the company's revenue appears to have helped boost 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 8957.0% when compared to the same quarter one year prior, rising from -$0.09 million to $8.24 million.
  • Net operating cash flow has significantly increased by 118.41% to $10.37 million when compared to the same quarter last year. In addition, KCAP FINANCIAL INC has also vastly surpassed the industry average cash flow growth rate of -95.23%.
  • The gross profit margin for KCAP FINANCIAL INC is currently very high, coming in at 82.26%. Regardless of KCAP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, KCAP's net profit margin of 60.22% significantly outperformed against the industry.
  • KCAP FINANCIAL INC has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. 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, KCAP FINANCIAL INC reported lower earnings of $0.53 versus $0.91 in the prior year. This year, the market expects an improvement in earnings ($0.97 versus $0.53).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Grupo Aeroportuario del Centro Norte SAB de

Dividend Yield: 7.90%

Grupo Aeroportuario del Centro Norte SAB de

(NASDAQ:

OMAB

) shares currently have a dividend yield of 7.90%.

Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., through its subsidiaries, develops, operates, and maintains airports in Mexico. It also operates NH T2 Hotel inside Terminal 2 of the Mexico City International Airport. The company has a P/E ratio of 20.92.

The average volume for Grupo Aeroportuario del Centro Norte SAB de has been 39,100 shares per day over the past 30 days. Grupo Aeroportuario del Centro Norte SAB de has a market cap of $1.9 billion and is part of the transportation industry. Shares are up 6.2% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates

Grupo Aeroportuario del Centro Norte SAB de

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:

  • OMAB's revenue growth trails the industry average of 28.8%. Since the same quarter one year prior, revenues slightly increased by 8.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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 Transportation Infrastructure industry and the overall market, GRUPO AEROPORTUARIO DEL CENT's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 218.11% to $41.05 million when compared to the same quarter last year. In addition, GRUPO AEROPORTUARIO DEL CENT has also vastly surpassed the industry average cash flow growth rate of 35.45%.
  • OMAB's debt-to-equity ratio of 0.82 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.98 is very high and demonstrates very strong liquidity.
  • 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 57.11% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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