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."

SCANA

Dividend Yield: 4.10%

SCANA

(NYSE:

SCG

) shares currently have a dividend yield of 4.10%.

SCANA Corporation, through its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity to retail and wholesale customers in South Carolina. It owns nuclear, coal, hydro, natural gas and oil, and biomass generating facilities. The company has a P/E ratio of 10.11.

The average volume for SCANA has been 899,500 shares per day over the past 30 days. SCANA has a market cap of $7.6 billion and is part of the utilities industry. Shares are down 14.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

SCANA

as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, notable return on equity, reasonable valuation levels and good cash flow from operations. 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 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.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Multi-Utilities industry average. The net income increased by 3.1% when compared to the same quarter one year prior, going from $96.00 million to $99.00 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. Compared to other companies in the Multi-Utilities industry and the overall market, SCANA CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $182.00 million or 11.65% when compared to the same quarter last year. Despite an increase in cash flow, SCANA CORP's cash flow growth rate is still lower than the industry average growth rate of 42.19%.

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PacWest Bancorp

Dividend Yield: 4.70%

PacWest Bancorp

(NASDAQ:

PACW

) shares currently have a dividend yield of 4.70%.

PacWest Bancorp operates as the holding company for Pacific Western Bank that provides commercial banking products and services to individuals, professionals, and small to mid-sized businesses in the United States. It accepts demand, money market, and time deposits. The company has a P/E ratio of 14.36.

The average volume for PacWest Bancorp has been 746,300 shares per day over the past 30 days. PacWest Bancorp has a market cap of $4.4 billion and is part of the banking industry. Shares are down 10% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

PacWest Bancorp

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 1.7%. Since the same quarter one year prior, revenues rose by 11.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PACWEST BANCORP 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, PACWEST BANCORP increased its bottom line by earning $1.97 versus $1.08 in the prior year. This year, the market expects an improvement in earnings ($2.90 versus $1.97).
  • 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 706.1% when compared to the same quarter one year prior, rising from $10.56 million to $85.08 million.
  • The gross profit margin for PACWEST BANCORP is currently very high, coming in at 90.58%. Regardless of PACW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PACW's net profit margin of 35.73% significantly outperformed against the industry.
  • Net operating cash flow has significantly increased by 552.48% to $152.51 million when compared to the same quarter last year. Despite an increase in cash flow of 552.48%, PACWEST BANCORP is still growing at a significantly lower rate than the industry average of 1371.99%.

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Hospitality Properties

Dividend Yield: 7.80%

Hospitality Properties

(NYSE:

HPT

) shares currently have a dividend yield of 7.80%.

Hospitality Properties Trust, a real estate investment trust (REIT), engages in buying, owning, and leasing hotels. The company has a P/E ratio of 18.37.

The average volume for Hospitality Properties has been 1,000,700 shares per day over the past 30 days. Hospitality Properties has a market cap of $3.9 billion and is part of the real estate industry. Shares are down 18.4% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Hospitality Properties

as a

buy

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

Highlights from the ratings report include:

  • HPT's revenue growth has slightly outpaced the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 12.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • HOSPITALITY PROPERTIES TRUST 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, HOSPITALITY PROPERTIES TRUST increased its bottom line by earning $1.18 versus $0.73 in the prior year. This year, the market expects an improvement in earnings ($1.67 versus $1.18).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 54.2% when compared to the same quarter one year prior, rising from $53.92 million to $83.15 million.
  • Net operating cash flow has increased to $156.00 million or 13.01% when compared to the same quarter last year. Despite an increase in cash flow, HOSPITALITY PROPERTIES TRUST's average is still marginally south of the industry average growth rate of 15.97%.

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