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."

Arbor Realty

Dividend Yield: 9.10%

Arbor Realty

(NYSE:

ABR

) shares currently have a dividend yield of 9.10%.

Arbor Realty Trust, Inc., a specialized real estate finance company, invests in various structured finance investments. The company has a P/E ratio of 7.31.

The average volume for Arbor Realty has been 127,300 shares per day over the past 30 days. Arbor Realty has a market cap of $335.3 million and is part of the real estate industry. Shares are down 7.7% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Arbor Realty

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.1%. Since the same quarter one year prior, revenues slightly increased by 2.8%. 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 gross profit margin for ARBOR REALTY TRUST INC is rather high; currently it is at 53.73%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 43.47% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $16.08 million or 41.84% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 9.44%.
  • After a year of stock price fluctuations, the net result is that ABR'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. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

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Manhattan Bridge Capital

Dividend Yield: 8.40%

Manhattan Bridge Capital

(NASDAQ:

LOAN

) shares currently have a dividend yield of 8.40%.

Manhattan Bridge Capital, Inc., a real estate finance company, originates, services, and manages a portfolio of first mortgage loans in the United States. The company has a P/E ratio of 12.72.

The average volume for Manhattan Bridge Capital has been 19,800 shares per day over the past 30 days. Manhattan Bridge Capital has a market cap of $29.4 million and is part of the financial services industry. Shares are down 7.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Manhattan Bridge Capital

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, attractive valuation levels, 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 came in higher than the industry average of 15.2%. Since the same quarter one year prior, revenues rose by 34.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MANHATTAN BRIDGE CAPITAL INC has improved earnings per share by 12.5% 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, MANHATTAN BRIDGE CAPITAL INC increased its bottom line by earning $0.29 versus $0.15 in the prior year. This year, the market expects an improvement in earnings ($0.34 versus $0.29).
  • The gross profit margin for MANHATTAN BRIDGE CAPITAL INC is currently very high, coming in at 77.79%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 61.97% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 77.59% to $0.74 million when compared to the same quarter last year. In addition, MANHATTAN BRIDGE CAPITAL INC has also vastly surpassed the industry average cash flow growth rate of -17.14%.

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Holly Energy Partners

Dividend Yield: 8.90%

Holly Energy Partners

(NYSE:

HEP

) shares currently have a dividend yield of 8.90%.

Holly Energy Partners, L.P. owns and operates petroleum product and crude pipelines, storage tanks, distribution terminals, and loading rack facilities. The company has a P/E ratio of 17.37.

The average volume for Holly Energy Partners has been 149,500 shares per day over the past 30 days. Holly Energy Partners has a market cap of $1.5 billion and is part of the energy industry. Shares are down 15.6% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Holly Energy Partners

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and growth in earnings per share. 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 revenue growth greatly exceeded the industry average of 36.9%. Since the same quarter one year prior, revenues slightly increased by 7.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HOLLY ENERGY PARTNERS LP has improved earnings per share by 14.3% 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. We feel that this trend should continue. During the past fiscal year, HOLLY ENERGY PARTNERS LP increased its bottom line by earning $1.20 versus $0.88 in the prior year. This year, the market expects an improvement in earnings ($1.55 versus $1.20).
  • 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 16.2% when compared to the same quarter one year prior, going from $29.68 million to $34.49 million.
  • 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, HOLLY ENERGY PARTNERS LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for HOLLY ENERGY PARTNERS LP is currently very high, coming in at 72.74%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 39.01% significantly outperformed against the industry average.

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