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."

Ardmore Shipping

Dividend Yield: 9.60%

Ardmore Shipping

(NYSE:

ASC

) shares currently have a dividend yield of 9.60%.

Ardmore Shipping Corporation engages in the seaborne transportation of petroleum products and chemicals through product and chemical tankers worldwide. As of December 31, 2014, the company operated 14 vessels, as well as had 10 vessels under construction. The company has a P/E ratio of 20.59.

The average volume for Ardmore Shipping has been 288,500 shares per day over the past 30 days. Ardmore Shipping has a market cap of $338.6 million and is part of the transportation industry. Shares are up 6.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Ardmore Shipping

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:

  • ASC's very impressive revenue growth greatly exceeded the industry average of 37.2%. Since the same quarter one year prior, revenues leaped by 150.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • This stock has managed to rise its share value by 24.23% over the past twelve months. 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ARDMORE SHIPPING CORP's return on equity is below that of both the industry average and the S&P 500.
  • The debt-to-equity ratio of 1.12 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, ASC's quick ratio is somewhat strong at 1.45, demonstrating the ability to handle short-term liquidity needs.

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PennantPark Floating Rate Capital

Dividend Yield: 9.70%

PennantPark Floating Rate Capital

(NASDAQ:

PFLT

) shares currently have a dividend yield of 9.70%.

PennantPark Floating Rate Capital Ltd. is a business development company. It seeks to make secondary direct, debt, equity, and loan investments. The fund seeks to invest through floating rate loans in private or thinly traded or small market-cap, public middle market companies. The company has a P/E ratio of 8.49.

The average volume for PennantPark Floating Rate Capital has been 141,200 shares per day over the past 30 days. PennantPark Floating Rate Capital has a market cap of $174.6 million and is part of the financial services industry. Shares are down 15.2% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

PennantPark Floating Rate 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 disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The gross profit margin for PENNANTPARK FLOATING RT CAP is currently very high, coming in at 71.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 66.52% significantly outperformed against the industry average.
  • PENNANTPARK FLOATING RT CAP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, PENNANTPARK FLOATING RT CAP increased its bottom line by earning $1.38 versus $1.30 in the prior year. For the next year, the market is expecting a contraction of 10.9% in earnings ($1.23 versus $1.38).
  • Net operating cash flow has significantly decreased to -$17.51 million or 164.42% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 Capital Markets industry and the overall market, PENNANTPARK FLOATING RT CAP's return on equity is below that of both the industry average and the S&P 500.

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Arc Logistics Partners

Dividend Yield: 11.20%

Arc Logistics Partners

(NYSE:

ARCX

) shares currently have a dividend yield of 11.20%.

Arc Logistics Partners LP engages in the terminalling, storage, throughput, and transloading of crude oil and petroleum products.

The average volume for Arc Logistics Partners has been 9,800 shares per day over the past 30 days. Arc Logistics Partners has a market cap of $206.7 million and is part of the energy industry. Shares are down 11.1% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Arc Logistics Partners

as a

hold

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

Highlights from the ratings report include:

  • ARCX's very impressive revenue growth greatly exceeded the industry average of 37.2%. Since the same quarter one year prior, revenues leaped by 75.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for ARC LOGISTICS PARTNERS LP is rather high; currently it is at 67.75%. It has increased significantly from the same period last year. Along with this, the net profit margin of 8.30% is above that of the industry average.
  • ARC LOGISTICS PARTNERS LP has improved earnings per share by 9.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ARC LOGISTICS PARTNERS LP reported lower earnings of $0.06 versus $0.13 in the prior year. This year, the market expects an improvement in earnings ($0.43 versus $0.06).
  • ARCX'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 32.25%, 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.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, ARC LOGISTICS PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.

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