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."

CrossAmerica Partners

Dividend Yield: 10.00%

CrossAmerica Partners

(NYSE:

CAPL

) shares currently have a dividend yield of 10.00%.

CrossAmerica Partners LP engages in the wholesale distribution of motor fuels, and ownership and leasing of real estate used in the retail distribution of motor fuels in the United States. It distributes gasoline and diesel fuel to approximately 1,100 sites located in 25 states. The company has a P/E ratio of 70.97.

The average volume for CrossAmerica Partners has been 110,800 shares per day over the past 30 days. CrossAmerica Partners has a market cap of $786.7 million and is part of the energy industry. Shares are down 8.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

CrossAmerica Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:

  • CROSSAMERICA PARTNERS 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CROSSAMERICA PARTNERS LP turned its bottom line around by earning $0.26 versus -$0.22 in the prior year. This year, the market expects an improvement in earnings ($0.62 versus $0.26).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 130.9% when compared to the same quarter one year prior, rising from -$13.64 million to $4.21 million.
  • 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 on the basis of return on equity, CROSSAMERICA PARTNERS LP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • CAPL'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 33.12%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • Currently the debt-to-equity ratio of 1.63 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.33, which clearly demonstrates the inability to cover short-term cash needs.

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Arbor Realty

Dividend Yield: 8.80%

Arbor Realty

(NYSE:

ABR

) shares currently have a dividend yield of 8.80%.

Arbor Realty Trust, Inc., a real estate finance company, invests in a diversified portfolio of structured finance assets in the multifamily and commercial real estate markets. The company has a P/E ratio of 7.52.

The average volume for Arbor Realty has been 113,400 shares per day over the past 30 days. Arbor Realty has a market cap of $346.5 million and is part of the real estate industry. Shares are down 4.9% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Arbor Realty

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.9%. Since the same quarter one year prior, revenues slightly increased by 1.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • 46.15% is the gross profit margin for ARBOR REALTY TRUST INC which we consider to be strong. Regardless of ABR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 20.67% 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ARBOR REALTY TRUST INC's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $0.75 million or 87.47% 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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Whitestone REIT

Dividend Yield: 9.30%

Whitestone REIT

(NYSE:

WSR

) shares currently have a dividend yield of 9.30%.

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 52.04.

The average volume for Whitestone REIT has been 174,400 shares per day over the past 30 days. Whitestone REIT has a market cap of $332.1 million and is part of the real estate industry. Shares are up 2.4% 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, growth in earnings per share 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 deteriorating net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 7.9%. Since the same quarter one year prior, revenues rose by 33.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • WHITESTONE REIT 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, WHITESTONE REIT increased its bottom line by earning $0.24 versus $0.22 in the prior year. This year, the market expects an improvement in earnings ($0.27 versus $0.24).
  • 44.83% 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 7.99% significantly trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Real Estate Investment Trusts (REITs) industry average. The net income has significantly decreased by 28.2% when compared to the same quarter one year ago, falling from $2.86 million to $2.05 million.
  • 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 26.29%, 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.

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