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.

TST Recommends

The following pages contain our analysis of 3 stocks with substantial yields, that ultimately, we have rated "Hold." America First Multifamily InvestorsDividend Yield: 9.10%America First Multifamily Investors (NASDAQ: ATAX) shares currently have a dividend yield of 9.10%. America First Multifamily Investors, L.P. acquires, holds, sells, and deals in a portfolio of mortgage revenue bonds that have been issued to provide construction or permanent financing for multifamily and student housing, and commercial properties. The company has a P/E ratio of 16.15. The average volume for America First Multifamily Investors has been 94,100 shares per day over the past 30 days. America First Multifamily Investors has a market cap of $330.8 million and is part of the real estate industry. Shares are up 9.1% year-to-date as of the close of trading on Tuesday. EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE. TheStreet Ratings rates America First Multifamily Investors as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall. Highlights from the ratings report include:

  • ATAX's very impressive revenue growth greatly exceeded the industry average of 9.1%. Since the same quarter one year prior, revenues leaped by 77.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AMERICA FIRST MULTIFAMILY-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 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, AMERICA FIRST MULTIFAMILY-LP increased its bottom line by earning $0.35 versus $0.25 in the prior year. This year, the market expects an improvement in earnings ($0.36 versus $0.35).
  • 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. When compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, AMERICA FIRST MULTIFAMILY-LP's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $5.11 million or 21.39% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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Apollo Investment

Dividend Yield: 14.00%

Apollo Investment

(NASDAQ:

AINV

) shares currently have a dividend yield of 14.00%. 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 1,206,600 shares per day over the past 30 days. Apollo Investment has a market cap of $1.3 billion and is part of the financial services industry. Shares are up 9.4% year-to-date as of the close of trading on Tuesday.

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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 good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, 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 increased to $55.91 million or 14.32% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -25.38%.
  • The gross profit margin for APOLLO INVESTMENT CORP is currently very high, coming in at 71.48%. 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 -27.32% is in-line with the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 23.1%. Since the same quarter one year prior, revenues fell by 14.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Looking at the price performance of AINV's shares over the past 12 months, there is not much good news to report: the stock is down 27.90%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, APOLLO INVESTMENT CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.

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Medley Capital

Dividend Yield: 17.80%

Medley Capital

(NYSE:

MCC

) shares currently have a dividend yield of 17.80%. Medley Capital Corporation is a business development company. The fund seeks to invest in privately negotiated debt and equity securities of small and middle market companies. The average volume for Medley Capital has been 357,700 shares per day over the past 30 days. Medley Capital has a market cap of $377.5 million and is part of the financial services industry. Shares are down 11% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Medley Capital

as a

hold

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. 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:

  • Net operating cash flow has significantly increased by 246.80% to $62.18 million when compared to the same quarter last year. In addition, MEDLEY CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of -25.38%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 23.1%. Since the same quarter one year prior, revenues fell by 13.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for MEDLEY CAPITAL CORP is rather high; currently it is at 65.75%. Regardless of MCC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MCC's net profit margin of -113.87% significantly underperformed when compared to the industry average.
  • 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 114.0% when compared to the same quarter one year ago, falling from -$18.32 million to -$39.20 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Capital Markets industry and the overall market, MEDLEY CAPITAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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