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.

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The following pages contain our analysis of 3 stocks with substantial yields, that ultimately, we have rated "Hold."

Copa Holdings

Dividend Yield: 6.20%

Copa Holdings

(NYSE:

CPA

) shares currently have a dividend yield of 6.20%.

Copa Holdings, S.A. provides airline passenger and cargo services in Latin America. It offers services within Colombia; and international flights from various cities in Colombia to Panama, Venezuela, Ecuador, Mexico, Cuba, Guatemala, and Costa Rica. The company has a P/E ratio of 7.45.

The average volume for Copa Holdings has been 902,700 shares per day over the past 30 days. Copa Holdings has a market cap of $1.8 billion and is part of the transportation industry. Shares are down 46.6% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Copa Holdings

as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.83 is somewhat weak and could be cause for future problems.
  • CPA, with its decline in revenue, underperformed when compared the industry average of 5.0%. Since the same quarter one year prior, revenues fell by 20.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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. In comparison to the other companies in the Airlines industry and the overall market, COPA HOLDINGS SA's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for COPA HOLDINGS SA is rather low; currently it is at 15.42%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 11.90% trails that of the industry average.

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NuStar Energy L.P

Dividend Yield: 8.70%

NuStar Energy L.P

(NYSE:

NS

) shares currently have a dividend yield of 8.70%.

NuStar Energy L.P. engages in the terminalling, storage, and marketing of petroleum products; and transportation of petroleum products and anhydrous ammonia primarily in the United States and the Netherlands. It operates through three segments: Pipeline, Storage, and Fuels Marketing. The company has a P/E ratio of 15.90.

The average volume for NuStar Energy L.P has been 334,100 shares per day over the past 30 days. NuStar Energy L.P has a market cap of $3.9 billion and is part of the energy industry. Shares are down 15.2% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

NuStar Energy L.P

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 a generally disappointing performance in the stock itself, generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:

  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, NUSTAR ENERGY LP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, NS has underperformed the S&P 500 Index, declining 14.97% 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.
  • Currently the debt-to-equity ratio of 1.82 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, NS's quick ratio is somewhat strong at 1.02, demonstrating the ability to handle short-term liquidity needs.

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Parkway Properties

Dividend Yield: 4.40%

Parkway Properties

(NYSE:

PKY

) shares currently have a dividend yield of 4.40%.

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 27.70.

The average volume for Parkway Properties has been 633,900 shares per day over the past 30 days. Parkway Properties has a market cap of $1.9 billion and is part of the real estate industry. Shares are down 7% year-to-date as of the close of trading on Thursday.

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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 9.8%. 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 62.1% in earnings ($0.11 versus $0.29).
  • PKY has underperformed the S&P 500 Index, declining 12.32% 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 rather low; currently it is at 15.78%. 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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