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: 13.10%

Banco Santander Brasil SA/Brazil

(NYSE:

BSBR

) shares currently have a dividend yield of 13.10%.

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 1,397,600 shares per day over the past 30 days. Banco Santander Brasil SA/Brazil has a market cap of $24.3 billion and is part of the banking industry. Shares are down 10.8% year-to-date as of the close of trading on Thursday.

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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 0.7%. 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 -96.49%.
  • 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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Whitestone REIT

Dividend Yield: 10.70%

Whitestone REIT

(NYSE:

WSR

) shares currently have a dividend yield of 10.70%.

WhiteStone REIT is a Maryland REIT engaged in owning and operating commercial properties in culturally diverse markets in major metropolitan areas. The company has a P/E ratio of 53.25.

The average volume for Whitestone REIT has been 184,300 shares per day over the past 30 days. Whitestone REIT has a market cap of $287.4 million and is part of the real estate industry. Shares are down 11.7% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Whitestone REIT

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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 32.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 42.3% when compared to the same quarter one year prior, rising from $1.10 million to $1.57 million.
  • 45.50% is the gross profit margin for WHITESTONE REIT which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, WSR's net profit margin of 6.36% significantly trails the industry average.
  • WSR'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 32.32%, 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. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, WSR is still more expensive than most of the other companies in its industry.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, WHITESTONE REIT's return on equity significantly trails that of both the industry average and the S&P 500.

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Cross Timbers Royalty

Dividend Yield: 13.80%

Cross Timbers Royalty

(NYSE:

CRT

) shares currently have a dividend yield of 13.80%.

Cross Timbers Royalty Trust operates as an express trust in the United States. The company has a P/E ratio of 5.35.

The average volume for Cross Timbers Royalty has been 33,900 shares per day over the past 30 days. Cross Timbers Royalty has a market cap of $88.2 million and is part of the energy industry. Shares are up 8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Cross Timbers Royalty

as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • CRT 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 16.45, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for CROSS TIMBERS ROYALTY TRUST is currently very high, coming in at 100.00%. CRT has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, CRT's net profit margin of 92.92% significantly outperformed against the industry.
  • CROSS TIMBERS ROYALTY TRUST 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 company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CROSS TIMBERS ROYALTY TRUST increased its bottom line by earning $2.67 versus $2.31 in the prior year.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CROSS TIMBERS ROYALTY TRUST's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The share price of CROSS TIMBERS ROYALTY TRUST has not done very well: it is down 22.07% 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.

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