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."

Old National Bancorp

Dividend Yield: 4.20%

Old National Bancorp

(NASDAQ:

ONB

) shares currently have a dividend yield of 4.20%.

Old National Bancorp operates as the holding company for Old National Bank, which provides various financial services to individual and commercial customers in the United States. It operates in two segments, Banking and Insurance. The company has a P/E ratio of 12.52.

The average volume for Old National Bancorp has been 1,154,800 shares per day over the past 30 days. Old National Bancorp has a market cap of $1.4 billion and is part of the banking industry. Shares are down 7.9% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Old National Bancorp

as a

buy

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, good cash flow from operations, expanding profit margins, impressive record of earnings per share growth and attractive valuation levels. 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 Commercial Banks industry. The net income increased by 29.0% when compared to the same quarter one year prior, rising from $20.91 million to $26.98 million.
  • Net operating cash flow has significantly increased by 405.16% to $15.76 million when compared to the same quarter last year. In addition, OLD NATIONAL BANCORP has also vastly surpassed the industry average cash flow growth rate of -155.48%.
  • The gross profit margin for OLD NATIONAL BANCORP is currently very high, coming in at 93.25%. Regardless of ONB'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 18.63% trails the industry average.
  • OLD NATIONAL BANCORP has improved earnings per share by 33.3% 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 year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, OLD NATIONAL BANCORP increased its bottom line by earning $1.00 versus $0.95 in the prior year. For the next year, the market is expecting a contraction of 5.0% in earnings ($0.95 versus $1.00).
  • ONB, with its decline in revenue, slightly underperformed the industry average of 1.3%. Since the same quarter one year prior, revenues slightly dropped by 5.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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ONEOK Partners

Dividend Yield: 8.30%

ONEOK Partners

(NYSE:

OKS

) shares currently have a dividend yield of 8.30%.

ONEOK Partners, L.P. engages in the gathering, processing, storage, and transportation of natural gas in the United States. It operates through three segments: Natural Gas Gathering and Processing, Natural Gas Liquids, and Natural Gas Pipelines. The company has a P/E ratio of 36.99.

The average volume for ONEOK Partners has been 803,900 shares per day over the past 30 days. ONEOK Partners has a market cap of $10.8 billion and is part of the energy industry. Shares are up 25.9% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

ONEOK Partners

as a

buy

. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels, good cash flow from operations, solid stock price performance and growth in earnings per share. 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:

  • 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 74.1% when compared to the same quarter one year prior, rising from $145.59 million to $253.52 million.
  • Net operating cash flow has significantly increased by 308.88% to $266.25 million when compared to the same quarter last year. In addition, ONEOK PARTNERS -LP has also vastly surpassed the industry average cash flow growth rate of -48.95%.
  • After a year of stock price fluctuations, the net result is that OKS'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.
  • ONEOK PARTNERS -LP 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, ONEOK PARTNERS -LP reported lower earnings of $0.77 versus $2.34 in the prior year. This year, the market expects an improvement in earnings ($2.29 versus $0.77).

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Invesco

Dividend Yield: 4.10%

Invesco

(NYSE:

IVZ

) shares currently have a dividend yield of 4.10%.

Invesco Ltd. is a publicly owned investment manager. The company has a P/E ratio of 15.11.

The average volume for Invesco has been 3,887,600 shares per day over the past 30 days. Invesco has a market cap of $11.5 billion and is part of the financial services industry. Shares are down 17.2% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Invesco

as a

buy

. The company's strongest point has been its very decent return on equity which we feel should persist. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • Despite the weak revenue results, IVZ has outperformed against the industry average of 24.4%. Since the same quarter one year prior, revenues fell by 11.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • INVESCO LTD's earnings per share declined by 36.7% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, INVESCO LTD reported lower earnings of $2.26 versus $2.27 in the prior year. This year, the market expects an improvement in earnings ($2.32 versus $2.26).
  • The change in net income from the same quarter one year ago has exceeded that of the Capital Markets industry average, but is less than that of the S&P 500. The net income has significantly decreased by 38.0% when compared to the same quarter one year ago, falling from $259.60 million to $161.00 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, INVESCO LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 30.43%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 36.66% compared to the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.

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