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."

Ciner Resources

Dividend Yield: 10.30%

Ciner Resources

(NYSE:

CINR

) shares currently have a dividend yield of 10.30%.

OCI Resources LP engages in the trona ore mining and soda ash production businesses in the United States and internationally. It processes trona ore into soda ash, which is a raw material in flat glass, container glass, detergents, chemicals, paper, and other consumer and industrial products. The company has a P/E ratio of 8.40.

The average volume for Ciner Resources has been 42,400 shares per day over the past 30 days. Ciner Resources has a market cap of $210.7 million and is part of the metals & mining industry. Shares are down 14.4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Ciner Resources

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 18.1%. Since the same quarter one year prior, revenues slightly increased by 6.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.80, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 2.70, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has increased to $41.40 million or 10.40% when compared to the same quarter last year. Despite an increase in cash flow, CINER RESOURCES LP's average is still marginally south of the industry average growth rate of 13.70%.
  • The gross profit margin for CINER RESOURCES LP is currently lower than what is desirable, coming in at 32.54%. Regardless of CINR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CINR's net profit margin of 11.15% compares favorably to the industry average.
  • CINR has underperformed the S&P 500 Index, declining 5.15% from its price level of one year ago. 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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United Development Funding IV

Dividend Yield: 17.30%

United Development Funding IV

(NASDAQ:

UDF

) shares currently have a dividend yield of 17.30%.

United Development Funding IV operates as a real estate investment trust (REIT) in the United States. The company has a P/E ratio of 5.15.

The average volume for United Development Funding IV has been 363,100 shares per day over the past 30 days. United Development Funding IV has a market cap of $290.5 million and is part of the real estate industry. Shares are down 48.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

United Development Funding IV

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 increase in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 18.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • UNITED DEV FUNDING IV has improved earnings per share by 6.8% in the most recent quarter compared to the same quarter a year ago.
  • When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, UNITED DEV FUNDING IV's return on equity is below that of both the industry average and the S&P 500.
  • UDF'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 41.38%, 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. 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.
  • Net operating cash flow has decreased to $12.74 million or 10.77% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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New Mountain Finance

Dividend Yield: 10.30%

New Mountain Finance

(NYSE:

NMFC

) shares currently have a dividend yield of 10.30%.

New Mountain Finance Corporation is a Business Development Company specializing in investments in middle market companies and debt securities at various levels of the capital structure, including first and second lien debt, unsecured notes, bonds, and mezzanine securities. The company has a P/E ratio of 9.16.

The average volume for New Mountain Finance has been 373,400 shares per day over the past 30 days. New Mountain Finance has a market cap of $844.2 million and is part of the financial services industry. Shares are down 12.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

New Mountain Finance

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 5.7%. Since the same quarter one year prior, revenues slightly increased by 7.9%. 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 Capital Markets industry. The net income increased by 32.3% when compared to the same quarter one year prior, rising from $7.41 million to $9.80 million.
  • NEW MOUNTAIN FINANCE CORP has improved earnings per share by 21.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NEW MOUNTAIN FINANCE CORP reported lower earnings of $0.87 versus $1.79 in the prior year. This year, the market expects an improvement in earnings ($1.38 versus $0.87).
  • NMFC has underperformed the S&P 500 Index, declining 6.99% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others 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. When compared to other companies in the Capital Markets industry and the overall market, NEW MOUNTAIN FINANCE CORP's return on equity is below that of both the industry average and the S&P 500.

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