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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."

One Liberty Properties

Dividend Yield: 7.10%

One Liberty Properties

(NYSE:

OLP

) shares currently have a dividend yield of 7.10%.

One Liberty Properties, Inc., a real estate investment trust (REIT), engages in the acquisition, ownership, and management of commercial real estate properties in the United States. The company has a P/E ratio of 13.92.

The average volume for One Liberty Properties has been 31,500 shares per day over the past 30 days. One Liberty Properties has a market cap of $363.5 million and is part of the real estate industry. Shares are down 7.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

One Liberty Properties

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TheStreet Recommends

as a

buy

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, solid stock price performance, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • After a year of stock price fluctuations, the net result is that OLP'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.
  • 49.82% is the gross profit margin for ONE LIBERTY PROPERTIES INC which we consider to be strong. Regardless of OLP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 23.49% trails the industry average.
  • OLP, with its decline in revenue, underperformed when compared the industry average of 9.7%. Since the same quarter one year prior, revenues slightly dropped by 0.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ONE LIBERTY PROPERTIES INC's return on equity is below that of both the industry average and the S&P 500.

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WhiteHorse Finance

Dividend Yield: 10.80%

WhiteHorse Finance

(NASDAQ:

WHF

) shares currently have a dividend yield of 10.80%.

Whitehorse Finance, LLC is a business development company. The company has a P/E ratio of 8.92.

The average volume for WhiteHorse Finance has been 36,800 shares per day over the past 30 days. WhiteHorse Finance has a market cap of $197.8 million and is part of the financial services industry. Shares are up 12.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

WhiteHorse Finance

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, good cash flow from operations, growth in earnings per share and increase in net income. We feel its 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 6.7%. Since the same quarter one year prior, revenues rose by 34.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • WHITEHORSE FINANCE INC has improved earnings per share by 11.8% 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, WHITEHORSE FINANCE INC increased its bottom line by earning $1.32 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($1.46 versus $1.32).
  • 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 14.6% when compared to the same quarter one year prior, going from $5.02 million to $5.75 million.
  • The gross profit margin for WHITEHORSE FINANCE INC is rather high; currently it is at 62.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 47.27% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 123.13% to $12.89 million when compared to the same quarter last year. In addition, WHITEHORSE FINANCE INC has also vastly surpassed the industry average cash flow growth rate of -425.92%.

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Gladstone Capital

Dividend Yield: 9.40%

Gladstone Capital

(NASDAQ:

GLAD

) shares currently have a dividend yield of 9.40%.

Gladstone Capital Corporation is a business development company specializing in investments in debt and equity securities. The company has a P/E ratio of 16.92.

The average volume for Gladstone Capital has been 112,900 shares per day over the past 30 days. Gladstone Capital has a market cap of $189.6 million and is part of the financial services industry. Shares are up 8.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Gladstone Capital

as a

buy

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, notable return on equity, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. 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 Capital Markets industry. The net income increased by 116.4% when compared to the same quarter one year prior, rising from -$20.18 million to $3.31 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 Capital Markets industry and the overall market, GLADSTONE CAPITAL CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for GLADSTONE CAPITAL CORP is currently very high, coming in at 71.98%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 33.28% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 56.36% to $17.38 million when compared to the same quarter last year. In addition, GLADSTONE CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of -425.92%.
  • GLADSTONE CAPITAL CORP reported significant earnings per share improvement 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, GLADSTONE CAPITAL CORP reported lower earnings of $0.53 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($0.84 versus $0.53).

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