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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: 10.70%

Ardmore Shipping

(NYSE:

ASC

) shares currently have a dividend yield of 10.70%.

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 18.33.

The average volume for Ardmore Shipping has been 312,700 shares per day over the past 30 days. Ardmore Shipping has a market cap of $301.6 million and is part of the transportation industry. Shares are down 14.9% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Ardmore Shipping

TheStreet Recommends

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and expanding profit margins. 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 36.9%. 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.
  • ARDMORE SHIPPING CORP has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. 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, ARDMORE SHIPPING CORP turned its bottom line around by earning $0.05 versus -$0.21 in the prior year. This year, the market expects an improvement in earnings ($1.40 versus $0.05).
  • 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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Rose Rock Midstream

Dividend Yield: 20.00%

Rose Rock Midstream

(NYSE:

RRMS

) shares currently have a dividend yield of 20.00%.

Rose Rock Midstream, L.P. owns, operates, develops, and acquires a portfolio of midstream energy assets. The company gathers, transports, stores, distributes, and markets crude oil in Colorado, Kansas, Louisiana, Montana, New Mexico, North Dakota, Ohio, Oklahoma, Texas, and Wyoming. The company has a P/E ratio of 9.16.

The average volume for Rose Rock Midstream has been 216,400 shares per day over the past 30 days. Rose Rock Midstream has a market cap of $485.3 million and is part of the energy industry. Shares are down 13.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Rose Rock Midstream

as a

hold

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

Highlights from the ratings report include:

  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ROSE ROCK MIDSTREAM LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 36.9%. Since the same quarter one year prior, revenues fell by 36.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 67.73%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 34.09% compared to the year-earlier 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.
  • ROSE ROCK MIDSTREAM LP's earnings per share declined by 34.1% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, ROSE ROCK MIDSTREAM LP reported lower earnings of $1.52 versus $1.70 in the prior year. For the next year, the market is expecting a contraction of 16.4% in earnings ($1.27 versus $1.52).

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CM Finance

Dividend Yield: 13.40%

CM Finance

(NASDAQ:

CMFN

) shares currently have a dividend yield of 13.40%.

CM Finance Inc. is a business development company. The company has a P/E ratio of 7.41.

The average volume for CM Finance has been 33,000 shares per day over the past 30 days. CM Finance has a market cap of $141.9 million and is part of the financial services industry. Shares are up 4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

CM Finance

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 5.5%. Since the same quarter one year prior, revenues rose by 25.5%. 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.
  • When compared to other companies in the Capital Markets industry and the overall market, CM FINANCE INC's return on equity is below that of both the industry average and the S&P 500.
  • The share price of CM FINANCE INC is down 7.49% when compared to where it was trading one year earlier. This reflects both (a) the trend in the overall market as well as (b) the sharp decline in the company's earnings per share. 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 significantly decreased by 96.3% when compared to the same quarter one year ago, falling from $4.59 million to $0.17 million.

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