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."

Capital Product Partners

Dividend Yield: 13.30%

Capital Product Partners

(NASDAQ:

CPLP

) shares currently have a dividend yield of 13.30%.

Capital Product Partners L.P., a shipping company, provides marine transportation services in Greece. The company has a P/E ratio of 22.19.

The average volume for Capital Product Partners has been 438,100 shares per day over the past 30 days. Capital Product Partners has a market cap of $739.0 million and is part of the transportation industry. Shares are down 10.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Capital Product Partners

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 increase in net income. 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 greatly exceeded the industry average of 34.4%. Since the same quarter one year prior, revenues slightly increased by 3.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.69, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, CPLP has a quick ratio of 2.27, which demonstrates the ability of the company to cover short-term liquidity needs.
  • CAPITAL PRODUCT PARTNERS LP has improved earnings per share by 12.5% 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, CAPITAL PRODUCT PARTNERS LP reported lower earnings of $0.31 versus $0.99 in the prior year. This year, the market expects an improvement in earnings ($0.45 versus $0.31).
  • CPLP'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 34.55%, 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.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CAPITAL PRODUCT PARTNERS LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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AG Mortgage Investment

Dividend Yield: 13.60%

AG Mortgage Investment

(NYSE:

MITT

) shares currently have a dividend yield of 13.60%.

AG Mortgage Investment Trust, Inc., a real estate investment trust, focuses on investing, acquiring, and managing a portfolio of mortgage assets, other real estate-related securities, and financial assets. It invests in residential mortgage-backed securities (RMBS), for which a U.S. The company has a P/E ratio of 13.20.

The average volume for AG Mortgage Investment has been 208,500 shares per day over the past 30 days. AG Mortgage Investment has a market cap of $502.6 million and is part of the real estate industry. Shares are down 4.6% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

AG Mortgage Investment

as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The gross profit margin for AG MORTGAGE INVESTMENT TRUST is currently very high, coming in at 82.10%. Regardless of MITT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MITT's net profit margin of 5.19% is significantly lower than the industry average.
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 95.5% when compared to the same quarter one year ago, falling from $41.17 million to $1.84 million.
  • 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, AG MORTGAGE INVESTMENT TRUST's return on equity is below that of both the industry average and the S&P 500.

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Altisource Residential Corporation

Dividend Yield: 14.00%

Altisource Residential Corporation

(NYSE:

RESI

) shares currently have a dividend yield of 14.00%.

Altisource Residential Corporation, through its subsidiary, Altisource Residential, L.P., focuses on acquiring, owning, and managing single-family rental properties in the United States. The company has a P/E ratio of 8.66.

The average volume for Altisource Residential Corporation has been 397,100 shares per day over the past 30 days. Altisource Residential Corporation has a market cap of $897.1 million and is part of the real estate industry. Shares are down 20.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Altisource Residential Corporation

as a

hold

. Among the primary strengths of the company is its attractive valuation levels, considering its current price compared to earnings, book value and other measures. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • The revenue fell significantly faster than the industry average of 9.8%. Since the same quarter one year prior, revenues fell by 34.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ALTISOURCE RESIDENTIAL CORP 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 reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ALTISOURCE RESIDENTIAL CORP increased its bottom line by earning $3.33 versus $1.16 in the prior year. For the next year, the market is expecting a contraction of 48.9% in earnings ($1.70 versus $3.33).
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 80.7% when compared to the same quarter one year ago, falling from $67.78 million to $13.09 million.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, ALTISOURCE RESIDENTIAL CORP's return on equity is below that of both the industry average and the S&P 500.

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