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."

Apollo Investment

Dividend Yield: 15.90%

Apollo Investment

(NASDAQ:

AINV

) shares currently have a dividend yield of 15.90%.

Apollo Investment Corporation is business development company and operates as a closed-end management investment company. The company invests in middle market companies. It provides direct equity capital, mezzanine and senior secured loans, and subordinated debt and loans.

The average volume for Apollo Investment has been 1,841,800 shares per day over the past 30 days. Apollo Investment has a market cap of $1.2 billion and is part of the financial services industry. Shares are down 4.2% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Apollo Investment

as a

hold

. The company's strengths can be seen in multiple areas, such as its expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The gross profit margin for APOLLO INVESTMENT CORP is currently very high, coming in at 72.47%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -1.77% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 145.34% to $83.12 million when compared to the same quarter last year. Despite an increase in cash flow of 145.34%, APOLLO INVESTMENT CORP is still growing at a significantly lower rate than the industry average of 276.16%.
  • AINV, with its decline in revenue, underperformed when compared the industry average of 5.6%. Since the same quarter one year prior, revenues fell by 17.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 104.2% when compared to the same quarter one year ago, falling from $41.97 million to -$1.75 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Capital Markets industry and the overall market, APOLLO INVESTMENT CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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Targa Resources

Dividend Yield: 19.40%

Targa Resources

(NYSE:

TRGP

) shares currently have a dividend yield of 19.40%.

Targa Resources Corp., through its general and limited partner interests in Targa Resources Partners LP, provides midstream natural gas and natural gas liquid (NGL) services in the United States. The company operates in two divisions, Gathering and Processing, and Logistics and Marketing. The company has a P/E ratio of 10.99.

The average volume for Targa Resources has been 1,773,000 shares per day over the past 30 days. Targa Resources has a market cap of $1.1 billion and is part of the energy industry. Shares are down 37% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Targa Resources

as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 123.36% to $211.30 million when compared to the same quarter last year. In addition, TARGA RESOURCES CORP has also vastly surpassed the industry average cash flow growth rate of -26.82%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 36.8%. Since the same quarter one year prior, revenues fell by 28.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The debt-to-equity ratio is very high at 4.01 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, TRGP maintains a poor quick ratio of 0.84, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TARGA RESOURCES CORP's return on equity is below that of both the industry average and the S&P 500.

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Total

Dividend Yield: 6.20%

Total

(NYSE:

TOT

) shares currently have a dividend yield of 6.20%.

TOTAL S.A. operates as an oil and gas company worldwide. The company operates through three segments: Upstream, Refining & Chemicals, and Marketing & Services.

The average volume for Total has been 1,821,800 shares per day over the past 30 days. Total has a market cap of $103.5 billion and is part of the energy industry. Shares are down 8.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Total

as a

hold

. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 36.8%. Since the same quarter one year prior, revenues fell by 35.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.58, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.79 is weak.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 68.8% when compared to the same quarter one year ago, falling from $3,463.00 million to $1,079.00 million.
  • The share price of TOTAL SA has not done very well: it is down 12.00% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, TOTAL SA underperformed against that of the industry average and is significantly less than that of the S&P 500.

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