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 "Hold."

American Capital Senior Floating

Dividend Yield: 9.00%

American Capital Senior Floating

(NASDAQ:

ACSF

) shares currently have a dividend yield of 9.00%.

American Capital Senior Floating, Ltd. is a close ended fixed income mutual fund launched by American Capital Asset Management, LLC. The fund is managed by American Capital ACSF Management, LLC. It invests in fixed income markets of the United States.

The average volume for American Capital Senior Floating has been 39,800 shares per day over the past 30 days. American Capital Senior Floating has a market cap of $130.0 million and is part of the financial services industry. Shares are up 7.3% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

American Capital Senior Floating

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 5.7%. Since the same quarter one year prior, revenues rose by 24.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AMERICAN CAPITAL SR FLTG LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.26 versus $0.37).
  • Net operating cash flow has significantly increased by 106.03% to $5.50 million when compared to the same quarter last year. Despite an increase in cash flow of 106.03%, AMERICAN CAPITAL SR FLTG LTD is still growing at a significantly lower rate than the industry average of 191.30%.
  • Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, AMERICAN CAPITAL SR FLTG LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • ACSF has underperformed the S&P 500 Index, declining 7.15% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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Hercules Technology Growth Capital

Dividend Yield: 10.50%

Hercules Technology Growth Capital

(NYSE:

HTGC

) shares currently have a dividend yield of 10.50%.

Hercules Technology Growth Capital, Inc. The company has a P/E ratio of 10.04.

The average volume for Hercules Technology Growth Capital has been 447,000 shares per day over the past 30 days. Hercules Technology Growth Capital has a market cap of $860.1 million and is part of the real estate industry. Shares are down 20.8% year-to-date as of the close of trading on Friday.

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TheStreet Recommends

TheStreet Ratings rates

Hercules Technology Growth Capital

as a

hold

. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • The gross profit margin for HERCULES TECH GROWTH CAP INC is currently very high, coming in at 79.95%. Regardless of HTGC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HTGC's net profit margin of 67.45% significantly outperformed against the industry.
  • HTGC, with its decline in revenue, underperformed when compared the industry average of 5.7%. Since the same quarter one year prior, revenues slightly dropped by 9.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, HTGC has underperformed the S&P 500 Index, declining 24.91% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Capital Markets industry and the overall market, HERCULES TECH GROWTH CAP INC's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$114.06 million or 418.17% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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CVR Partners

Dividend Yield: 14.50%

CVR Partners

(NYSE:

UAN

) shares currently have a dividend yield of 14.50%.

CVR Partners, LP produces, distributes, and markets nitrogen fertilizer products in North America. It provides ammonia products for industrial and agricultural customers; and urea ammonium nitrate (UAN) products for agricultural customers. The company has a P/E ratio of 10.69.

The average volume for CVR Partners has been 190,000 shares per day over the past 30 days. CVR Partners has a market cap of $906.7 million and is part of the chemicals industry. Shares are up 30.8% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

CVR Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 14.7%. Since the same quarter one year prior, revenues rose by 15.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.30, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 2.90, which clearly demonstrates the ability to cover short-term cash needs.
  • 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 Chemicals industry and the overall market on the basis of return on equity, CVR PARTNERS LP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Net operating cash flow has decreased to $25.37 million or 28.75% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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