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."

Alon USA Partners

Dividend Yield: 16.30%

Alon USA Partners

(NYSE:

ALDW

) shares currently have a dividend yield of 16.30%.

Alon USA Partners, LP refines and markets petroleum products primarily in the South Central and Southwestern regions of the United States. The company owns and operates a crude oil refinery in Big Spring, Texas with crude oil throughput capacity of 73,000 barrels per day. The company has a P/E ratio of 7.44.

The average volume for Alon USA Partners has been 230,300 shares per day over the past 30 days. Alon USA Partners has a market cap of $1.6 billion and is part of the energy industry. Shares are up 97.4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Alon USA Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 691.66% and other important driving factors, this stock has surged by 35.36% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • ALON USA PARTNERS LP 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ALON USA PARTNERS LP increased its bottom line by earning $2.70 versus $2.19 in the prior year. This year, the market expects an improvement in earnings ($2.97 versus $2.70).
  • Despite the weak revenue results, ALDW has outperformed against the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 13.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for ALON USA PARTNERS LP is currently extremely low, coming in at 14.98%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, ALDW's net profit margin of 9.50% compares favorably to the industry average.
  • The debt-to-equity ratio of 1.43 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, ALDW maintains a poor quick ratio of 0.83, which illustrates the inability to avoid short-term cash problems.

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Harte-Hanks

Dividend Yield: 8.80%

Harte-Hanks

(NYSE:

HHS

) shares currently have a dividend yield of 8.80%.

Harte-Hanks, Inc. provides various marketing services in the United States and internationally. The company operates in two segments, Customer Interaction and Trillium Software. The company has a P/E ratio of 17.50.

The average volume for Harte-Hanks has been 320,300 shares per day over the past 30 days. Harte-Hanks has a market cap of $237.5 million and is part of the media industry. Shares are down 45.9% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Harte-Hanks

as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, 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, feeble growth in the company's earnings per share and unimpressive growth in net income.

Highlights from the ratings report include:

  • HHS's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.19, which illustrates the ability to avoid short-term cash problems.
  • HHS, with its decline in revenue, underperformed when compared the industry average of 6.4%. Since the same quarter one year prior, revenues fell by 12.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • HARTE HANKS INC 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. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, HARTE HANKS INC reported lower earnings of $0.38 versus $0.39 in the prior year. For the next year, the market is expecting a contraction of 18.4% in earnings ($0.31 versus $0.38).
  • 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 Media industry. The net income has significantly decreased by 174.0% when compared to the same quarter one year ago, falling from $5.64 million to -$4.17 million.

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Manning & Napier

Dividend Yield: 7.40%

Manning & Napier

(NYSE:

MN

) shares currently have a dividend yield of 7.40%.

Manning & Napier, Inc. provides investment management products and services primarily in the United States. The company offers a range of investment solutions through separately managed accounts, mutual funds, and collective investment trust funds. The company has a P/E ratio of 8.05.

The average volume for Manning & Napier has been 119,200 shares per day over the past 30 days. Manning & Napier has a market cap of $128.4 million and is part of the financial services industry. Shares are down 37.9% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Manning & Napier

as a

hold

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:

  • MANNING & NAPIER 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. This trend suggests that the performance of the business is improving. During the past fiscal year, MANNING & NAPIER INC increased its bottom line by earning $0.67 versus $0.20 in the prior year. This year, the market expects an improvement in earnings ($0.99 versus $0.67).
  • 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 401.1% when compared to the same quarter one year prior, rising from $0.70 million to $3.50 million.
  • 39.55% is the gross profit margin for MANNING & NAPIER INC which we consider to be strong. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, MN's net profit margin of 4.02% significantly trails the industry average.
  • Net operating cash flow has decreased to $44.75 million or 17.80% when compared to the same quarter last year. Despite a decrease in cash flow of 17.80%, MANNING & NAPIER INC is still significantly exceeding the industry average of -422.49%.
  • MN's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 56.72%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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