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."

Banco Santander Brasil SA/Brazil

Dividend Yield: 13.70%

Banco Santander Brasil SA/Brazil

(NYSE:

BSBR

) shares currently have a dividend yield of 13.70%.

Banco Santander (Brasil) S.A. provides banking products and services in Brazil and internationally. The company offers commercial banking, investment, mortgage, leasing, credit card, and foreign exchange services, as well as various lending and financing services.

The average volume for Banco Santander Brasil SA/Brazil has been 1,264,500 shares per day over the past 30 days. Banco Santander Brasil SA/Brazil has a market cap of $23.2 billion and is part of the banking industry. Shares are down 20.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Banco Santander Brasil SA/Brazil

as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow 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 Commercial Banks industry and the overall market on the basis of return on equity, BANCO SANTANDER BRASIL -ADR has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • BSBR, with its very weak revenue results, has greatly underperformed against the industry average of 2.6%. Since the same quarter one year prior, revenues plummeted by 81.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has significantly decreased to $1,373.12 million or 84.44% when compared to the same quarter last year. Despite a decrease in cash flow BANCO SANTANDER BRASIL -ADR is still fairing well by exceeding its industry average cash flow growth rate of -96.18%.
  • 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 Commercial Banks industry. The net income has significantly decreased by 105.7% when compared to the same quarter one year ago, falling from $403.93 million to -$23.18 million.

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Alcentra Capital

Dividend Yield: 12.70%

Alcentra Capital

(NASDAQ:

ABDC

) shares currently have a dividend yield of 12.70%.

Alcentra Capital Corporation is a business development company specializing in investments in lower middle-market companies. The company has a P/E ratio of 7.10.

The average volume for Alcentra Capital has been 43,100 shares per day over the past 30 days. Alcentra Capital has a market cap of $145.0 million and is part of the financial services industry. Shares are down 10.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Alcentra Capital

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in 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 0.4%. Since the same quarter one year prior, revenues rose by 45.1%. 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.
  • Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, ALCENTRA CAPITAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • ALCENTRA CAPITAL CORP 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. This year, the market expects an improvement in earnings ($1.44 versus $1.35).
  • The share price of ALCENTRA CAPITAL CORP has not done very well: it is down 23.84% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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 58.8% when compared to the same quarter one year ago, falling from $7.90 million to $3.25 million.

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Textainer Group Holdings

Dividend Yield: 9.50%

Textainer Group Holdings

(NYSE:

TGH

) shares currently have a dividend yield of 9.50%.

Textainer Group Holdings Limited, together with its subsidiaries, engages in the purchase, ownership, management, leasing, and disposal of a fleet of intermodal containers worldwide. It operates through three segments: Container Ownership, Container Management, and Container Resale. The company has a P/E ratio of 3.19.

The average volume for Textainer Group Holdings has been 539,200 shares per day over the past 30 days. Textainer Group Holdings has a market cap of $575.3 million and is part of the diversified services industry. Shares are down 28.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Textainer Group Holdings

as a

hold

. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, 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 generally higher debt management risk.

Highlights from the ratings report include:

  • Net operating cash flow has slightly increased to $100.37 million or 3.65% when compared to the same quarter last year. In addition, TEXTAINER GROUP HOLDINGS LTD has also modestly surpassed the industry average cash flow growth rate of 1.22%.
  • The gross profit margin for TEXTAINER GROUP HOLDINGS LTD is currently very high, coming in at 87.11%. 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 7.29% trails the industry average.
  • 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. In comparison to the other companies in the Trading Companies & Distributors industry and the overall market, TEXTAINER GROUP HOLDINGS LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • 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 Trading Companies & Distributors industry. The net income has significantly decreased by 81.8% when compared to the same quarter one year ago, falling from $54.30 million to $9.89 million.

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