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

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."

BioMed Realty

Dividend Yield: 5.10%

BioMed Realty

(NYSE:

BMR

) shares currently have a dividend yield of 5.10%.

BioMed Realty Trust, Inc. operates as a real estate investment trust (REIT) that focuses on providing real estate to the life science industry in the United States. The company has a P/E ratio of 21.30.

The average volume for BioMed Realty has been 1,500,300 shares per day over the past 30 days. BioMed Realty has a market cap of $4.2 billion and is part of the real estate industry. Shares are down 5.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

BioMed Realty

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels 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:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 5.6%. 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 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, BIOMED REALTY TRUST INC's return on equity is below that of both the industry average and the S&P 500.
  • BIOMED REALTY TRUST INC's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BIOMED REALTY TRUST INC increased its bottom line by earning $0.98 versus $0.20 in the prior year. For the next year, the market is expecting a contraction of 73.5% in earnings ($0.26 versus $0.98).
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, BMR has underperformed the S&P 500 Index, declining 7.94% from its price level of one year ago. 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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TECO Energy

Dividend Yield: 4.20%

TECO Energy

(NYSE:

TE

) shares currently have a dividend yield of 4.20%.

TECO Energy, Inc., an electric and gas utility holding company, engages in the regulated electric and gas utility operations. The company has a P/E ratio of 21.84.

The average volume for TECO Energy has been 2,408,800 shares per day over the past 30 days. TECO Energy has a market cap of $5.0 billion and is part of the utilities industry. Shares are up 4.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

TECO Energy

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, growth in earnings per share, increase in net income 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 11.6%. Since the same quarter one year prior, revenues rose by 19.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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.
  • TECO ENERGY INC has improved earnings per share by 22.7% 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, TECO ENERGY INC increased its bottom line by earning $0.92 versus $0.88 in the prior year. This year, the market expects an improvement in earnings ($1.10 versus $0.92).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Multi-Utilities industry. The net income increased by 15.8% when compared to the same quarter one year prior, going from $50.10 million to $58.00 million.
  • 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 Multi-Utilities industry and the overall market, TECO ENERGY INC's return on equity is below that of both the industry average and the S&P 500.

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Avista

Dividend Yield: 4.20%

Avista

(NYSE:

AVA

) shares currently have a dividend yield of 4.20%.

Avista Corporation, an electric and natural gas utility company, generates, transmits, and distributes electricity; and distributes natural gas in the United States and Canada. It operates in two segments, Avista Utilities and Alaska Electric Light and Power Company. The company has a P/E ratio of 16.65.

The average volume for Avista has been 388,900 shares per day over the past 30 days. Avista has a market cap of $1.9 billion and is part of the utilities industry. Shares are down 10.3% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Avista

as a

buy

. Among the primary strengths of the company is its attractive valuation levels, considering its current price compared to earnings, book value and other measures. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • AVISTA CORP's earnings per share declined by 5.1% 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, AVISTA CORP increased its bottom line by earning $1.94 versus $1.72 in the prior year. This year, the market expects an improvement in earnings ($1.97 versus $1.94).
  • Despite the weak revenue results, AVA has outperformed against the industry average of 11.6%. Since the same quarter one year prior, revenues slightly dropped by 0.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Multi-Utilities industry average. The net income has decreased by 4.2% when compared to the same quarter one year ago, dropping from $48.50 million to $46.45 million.
  • The gross profit margin for AVISTA CORP is currently lower than what is desirable, coming in at 27.78%. Regardless of AVA's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.40% trails the industry average.

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