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."

Lamar Advertising

Dividend Yield: 4.80%

Lamar Advertising

(NASDAQ:

LAMR

) shares currently have a dividend yield of 4.80%.

Lamar Advertising Company is a publicly owned equity real estate investment trust. The firm primarily engages in selling advertising space on billboards, buses, shelters, benches, and logo plates. Lamar Advertising Company was founded in 1902 and is headquartered in Baton Rouge, Louisiana. The company has a P/E ratio of 23.02.

The average volume for Lamar Advertising has been 655,200 shares per day over the past 30 days. Lamar Advertising has a market cap of $6.1 billion and is part of the real estate industry. Shares are up 3.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Lamar Advertising

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, 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:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.1%. Since the same quarter one year prior, revenues slightly increased by 5.7%. 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.
  • Net operating cash flow has slightly increased to $164.18 million or 9.94% when compared to the same quarter last year. In addition, LAMAR ADVERTISING CO has also modestly surpassed the industry average cash flow growth rate of 2.08%.
  • After a year of stock price fluctuations, the net result is that LAMR'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.
  • LAMAR ADVERTISING CO has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, LAMAR ADVERTISING CO increased its bottom line by earning $2.71 versus $2.66 in the prior year. This year, the market expects an improvement in earnings ($3.02 versus $2.71).
  • The gross profit margin for LAMAR ADVERTISING CO is rather high; currently it is at 65.82%. Regardless of LAMR'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 21.49% trails the industry average.

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BGC Partners

Dividend Yield: 5.90%

BGC Partners

(NASDAQ:

BGCP

) shares currently have a dividend yield of 5.90%.

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 18.86.

The average volume for BGC Partners has been 1,139,400 shares per day over the past 30 days. BGC Partners has a market cap of $2.6 billion and is part of the financial services industry. Shares are down 3.7% 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, notable return on equity, impressive record of earnings per share growth and compelling growth in net income. 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 22.6%. Since the same quarter one year prior, revenues rose by 37.6%. Growth in the company's revenue appears to have helped boost the 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. In comparison to the other companies in the Capital Markets industry and the overall market, BGC PARTNERS INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • BGC PARTNERS INC reported significant earnings per share improvement 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, 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 ($0.87 versus $0.49).
  • 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 447.9% when compared to the same quarter one year prior, rising from -$18.69 million to $65.02 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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Chesapeake Lodging

Dividend Yield: 6.40%

Chesapeake Lodging

(NYSE:

CHSP

) shares currently have a dividend yield of 6.40%.

Chesapeake Lodging Trust is a self-advised real estate investment trust organized in the state of Maryland in June 2009. The company focuses on investments primarily in upper-upscale hotels in major business and convention markets and premium select-service hotels in urban settings or unique locations in the United States. The company has a P/E ratio of 25.09.

The average volume for Chesapeake Lodging has been 354,700 shares per day over the past 30 days. Chesapeake Lodging has a market cap of $1.5 billion and is part of the real estate industry. Shares are down 0.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Chesapeake Lodging

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, reasonable valuation levels, good cash flow from operations and growth in earnings per share. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 8.1%. Since the same quarter one year prior, revenues rose by 18.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 66.7% when compared to the same quarter one year prior, rising from $8.84 million to $14.73 million.
  • Net operating cash flow has increased to $43.08 million or 26.91% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 2.08%.
  • CHESAPEAKE LODGING TRUST 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, CHESAPEAKE LODGING TRUST reported lower earnings of $0.97 versus $1.01 in the prior year. This year, the market expects an improvement in earnings ($1.30 versus $0.97).

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