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."

BGC Partners

Dividend Yield: 7.50%

BGC Partners

(NASDAQ:

BGCP

) shares currently have a dividend yield of 7.50%.

BGC Partners, Inc. operates as a brokerage company in the United Kingdom, the United States, Asia, France, other parts of the Americas and Europe, the Middle East, and Africa. It operates in two segments, Financial Services and Real Estate Services. The company has a P/E ratio of 16.29.

The average volume for BGC Partners has been 1,153,100 shares per day over the past 30 days. BGC Partners has a market cap of $2.4 billion and is part of the financial services industry. Shares are down 15.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

BGC Partners

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 23.7%. Since the same quarter one year prior, revenues rose by 16.7%. 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.
  • 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 Capital Markets industry and the overall market, BGC PARTNERS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • BGC PARTNERS INC's earnings per share declined by 16.7% 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, BGC PARTNERS INC increased its bottom line by earning $0.49 versus $0.02 in the prior year. This year, the market expects an improvement in earnings ($0.85 versus $0.49).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income has decreased by 2.8% when compared to the same quarter one year ago, dropping from $14.06 million to $13.66 million.
  • After a year of stock price fluctuations, the net result is that BGCP'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. Despite the decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.

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Nordic American Tankers

Dividend Yield: 12.10%

Nordic American Tankers

(NYSE:

NAT

) shares currently have a dividend yield of 12.10%.

Nordic American Tankers Limited, a tanker company, engages in acquiring and chartering double-hull tankers in Bermuda and internationally. It operates a fleet of 26 Suezmax crude oil tankers. The company was founded in 1995 and is based in Hamilton, Bermuda. The company has a P/E ratio of 10.74.

The average volume for Nordic American Tankers has been 1,329,100 shares per day over the past 30 days. Nordic American Tankers has a market cap of $1.3 billion and is part of the transportation industry. Shares are down 12.2% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Nordic American Tankers

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, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 24.1%. Since the same quarter one year prior, revenues rose by 20.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 4.59, 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, NORDIC AMERICAN TANKERS LTD's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • The gross profit margin for NORDIC AMERICAN TANKERS LTD is rather high; currently it is at 51.99%. It has increased significantly from the same period last year. Along with this, the net profit margin of 26.32% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $35.19 million or 26.39% when compared to the same quarter last year. In addition, NORDIC AMERICAN TANKERS LTD has also vastly surpassed the industry average cash flow growth rate of -49.95%.

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Spectra Energy

Dividend Yield: 4.40%

Spectra Energy

(NYSE:

SE

) shares currently have a dividend yield of 4.40%.

Spectra Energy Corp owns and operates a portfolio of natural gas-related energy assets in North America. It operates through four segments: Spectra Energy Partners, Distribution, Western Canada Transmission & Processing, and Field Services. The company has a P/E ratio of 151.67.

The average volume for Spectra Energy has been 4,513,400 shares per day over the past 30 days. Spectra Energy has a market cap of $25.1 billion and is part of the energy industry. Shares are up 51.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Spectra Energy

as a

buy

. The company's strengths can be seen in multiple areas, such as its expanding profit margins and solid stock price performance. We feel its 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:

  • 49.64% is the gross profit margin for SPECTRA ENERGY CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.90% significantly outperformed against the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 24.1%. Since the same quarter one year prior, revenues fell by 14.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • SPECTRA ENERGY CORP's earnings per share declined by 12.5% 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, SPECTRA ENERGY CORP reported lower earnings of $0.30 versus $1.61 in the prior year. This year, the market expects an improvement in earnings ($1.17 versus $0.30).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 12.4% when compared to the same quarter one year ago, dropping from $267.00 million to $234.00 million.
  • 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, despite the company's weak earnings results. Looking ahead, the stock's 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 the other strengths this company displays justify these higher price levels.

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