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 or Stephanie Link.

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."

Anworth Mortgage Asset

Dividend Yield: 10.80%

Anworth Mortgage Asset

(NYSE:

ANH

) shares currently have a dividend yield of 10.80%.

Anworth Mortgage Asset Corporation operates as a real estate investment trust in the United States. The company primarily invests in the United States agency mortgage-backed securities, which are securities representing obligations guaranteed by the U.S. The company has a P/E ratio of 14.05.

The average volume for Anworth Mortgage Asset has been 956,800 shares per day over the past 30 days. Anworth Mortgage Asset has a market cap of $589.0 million and is part of the real estate industry. Shares are down 0.2% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Anworth Mortgage Asset

as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The gross profit margin for ANWORTH MTG ASSET CORP is currently very high, coming in at 88.96%. Regardless of ANH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ANH's net profit margin of 61.51% significantly outperformed against the industry.
  • ANWORTH MTG ASSET CORP has improved earnings per share by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ANWORTH MTG ASSET CORP reported lower earnings of $0.49 versus $0.68 in the prior year. For the next year, the market is expecting a contraction of 24.5% in earnings ($0.37 versus $0.49).
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ANWORTH MTG ASSET CORP's return on equity is below that of both the industry average and the S&P 500.

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WhiteHorse Finance

Dividend Yield: 12.40%

WhiteHorse Finance

(NASDAQ:

WHF

) shares currently have a dividend yield of 12.40%.

Whitehorse Finance, LLC is a business development company. The company has a P/E ratio of 7.73.

The average volume for WhiteHorse Finance has been 44,400 shares per day over the past 30 days. WhiteHorse Finance has a market cap of $171.4 million and is part of the financial services industry. Shares are down 1.6% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates

WhiteHorse Finance

as a

hold

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

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 510.38% to $20.81 million when compared to the same quarter last year. In addition, WHITEHORSE FINANCE INC has also vastly surpassed the industry average cash flow growth rate of -75.50%.
  • The gross profit margin for WHITEHORSE FINANCE INC is rather high; currently it is at 58.80%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, WHF's net profit margin of 49.24% significantly outperformed against the industry.
  • 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 Capital Markets industry and the overall market on the basis of return on equity, WHITEHORSE FINANCE INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, WHF has underperformed the S&P 500 Index, declining 23.65% 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.
  • 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 decreased by 24.2% when compared to the same quarter one year ago, dropping from $6.02 million to $4.56 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

SMTP

Dividend Yield: 8.80%

SMTP

(NASDAQ:

SMTP

) shares currently have a dividend yield of 8.80%.

SMTP, Inc. provides Internet-based services to facilitate email delivery worldwide. It offers services to enable businesses of various scales to outsource the sending of outbound emails. The company has a P/E ratio of 32.06.

The average volume for SMTP has been 8,500 shares per day over the past 30 days. SMTP has a market cap of $29.7 million and is part of the internet industry. Shares are down 10.4% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates

SMTP

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 reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • SMTP's revenue growth trails the industry average of 28.5%. Since the same quarter one year prior, revenues rose by 11.0%. 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.
  • SMTP has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 7.05, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for SMTP INC is currently very high, coming in at 80.99%. Regardless of SMTP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SMTP's net profit margin of -6.00% significantly underperformed when compared to the industry average.
  • Net operating cash flow has significantly decreased to -$0.01 million or 101.35% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.79%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 120.00% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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