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."

Coach

Dividend Yield: 4.60%

Coach

(NYSE:

COH

) shares currently have a dividend yield of 4.60%.

Coach, Inc. provides luxury accessories and lifestyle collections in the United States. The company has a P/E ratio of 20.26.

The average volume for Coach has been 4,538,500 shares per day over the past 30 days. Coach has a market cap of $8.1 billion and is part of the consumer non-durables industry. Shares are down 20.3% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Coach

as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:

  • The gross profit margin for COACH INC is currently very high, coming in at 74.39%. 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 1.16% trails the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.36, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that COH's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.09 is high and demonstrates strong liquidity.
  • Net operating cash flow has decreased to $186.60 million or 40.96% 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.
  • 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 Textiles, Apparel & Luxury Goods industry. The net income has significantly decreased by 84.5% when compared to the same quarter one year ago, falling from $75.28 million to $11.70 million.

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EnLink Midstream Partners

Dividend Yield: 9.00%

EnLink Midstream Partners

(NYSE:

ENLK

) shares currently have a dividend yield of 9.00%.

Enlink Midstream Partners, LP, through its subsidiary, EnLink Midstream Operating, LP, provides midstream energy services. The company has a P/E ratio of 30.95.

The average volume for EnLink Midstream Partners has been 640,400 shares per day over the past 30 days. EnLink Midstream Partners has a market cap of $4.8 billion and is part of the energy industry. Shares are down 39.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

EnLink Midstream Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures 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, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 34.3%. Since the same quarter one year prior, revenues rose by 37.4%. 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.
  • The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.04, which illustrates the ability to avoid short-term cash problems.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, ENLINK MIDSTREAM PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ENLINK MIDSTREAM PARTNERS LP is currently extremely low, coming in at 14.66%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.35% trails that of the industry average.

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Parkway Properties

Dividend Yield: 4.80%

Parkway Properties

(NYSE:

PKY

) shares currently have a dividend yield of 4.80%.

Parkway Properties, Inc., a real estate investment trust (REIT), engages in the operation, acquisition, ownership, management, and leasing of office properties. It operates and invests principally in office properties in the southeastern and southwestern United States and Chicago. The company has a P/E ratio of 25.43.

The average volume for Parkway Properties has been 687,400 shares per day over the past 30 days. Parkway Properties has a market cap of $1.7 billion and is part of the real estate industry. Shares are down 14.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Parkway Properties

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 reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • PKY's revenue growth has slightly outpaced the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 15.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PARKWAY PROPERTIES INC 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, PARKWAY PROPERTIES INC turned its bottom line around by earning $0.29 versus -$0.60 in the prior year. For the next year, the market is expecting a contraction of 24.1% in earnings ($0.22 versus $0.29).
  • PKY has underperformed the S&P 500 Index, declining 24.08% 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.
  • The gross profit margin for PARKWAY PROPERTIES INC is currently extremely low, coming in at 9.56%. Regardless of PKY's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PKY's net profit margin of 11.07% is significantly lower than the industry average.

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