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."

CenturyLink

Dividend Yield: 7.10%

CenturyLink

(NYSE:

CTL

) shares currently have a dividend yield of 7.10%.

CenturyLink, Inc. provides various communications services to residential, business, wholesale, and governmental customers in the United States. It operates through two segments, Business and Consumer. The company has a P/E ratio of 18.23.

The average volume for CenturyLink has been 5,325,100 shares per day over the past 30 days. CenturyLink has a market cap of $16.7 billion and is part of the telecommunications industry. Shares are up 22.1% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

CenturyLink

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 good cash flow from operations. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:

  • CENTURYLINK INC has improved earnings per share by 29.4% 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, CENTURYLINK INC increased its bottom line by earning $1.59 versus $1.35 in the prior year. This year, the market expects an improvement in earnings ($2.59 versus $1.59).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Diversified Telecommunication Services industry average. The net income increased by 22.9% when compared to the same quarter one year prior, going from $192.00 million to $236.00 million.
  • The gross profit margin for CENTURYLINK INC is rather high; currently it is at 56.87%. Regardless of CTL'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 5.36% trails the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Diversified Telecommunication Services industry and the overall market, CENTURYLINK INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Even though the current debt-to-equity ratio is 1.43, it is still below the industry average, suggesting that this level of debt is acceptable within the Diversified Telecommunication Services industry. Despite the fact that CTL's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.60 is low and demonstrates weak liquidity.

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Artisan Partners Asset Management

Dividend Yield: 8.70%

Artisan Partners Asset Management

(NYSE:

APAM

) shares currently have a dividend yield of 8.70%.

Artisan Partners Asset Management Inc is publicly owned investment manager. It provides its services to pension and profit sharing plans, trusts, endowments, foundations, charitable organizations, government entities, private funds and non-U.S. funds, as well as mutual funds, non-U.S. The company has a P/E ratio of 15.56.

The average volume for Artisan Partners Asset Management has been 387,900 shares per day over the past 30 days. Artisan Partners Asset Management has a market cap of $2.1 billion and is part of the financial services industry. Shares are down 22.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Artisan Partners Asset Management

as a

hold

. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, we also find weaknesses including deteriorating net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • ARTISAN PARTNERS ASSET MGMT's earnings per share declined by 24.0% 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, ARTISAN PARTNERS ASSET MGMT turned its bottom line around by earning $1.84 versus -$0.72 in the prior year. This year, the market expects an improvement in earnings ($2.22 versus $1.84).
  • APAM, with its decline in revenue, slightly underperformed the industry average of 13.7%. Since the same quarter one year prior, revenues fell by 14.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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. Compared to other companies in the Capital Markets industry and the overall market, ARTISAN PARTNERS ASSET MGMT's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for ARTISAN PARTNERS ASSET MGMT is currently lower than what is desirable, coming in at 32.58%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 10.12% trails that of 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 Capital Markets industry. The net income has decreased by 22.9% when compared to the same quarter one year ago, dropping from $23.74 million to $18.30 million.

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Seagate Technology

Dividend Yield: 7.80%

Seagate Technology

(NASDAQ:

STX

) shares currently have a dividend yield of 7.80%.

Seagate Technology Public Limited Company designs, manufactures, and sells electronic data storage products in the Asia Pacific, the Americas, and EMEA countries. The company has a P/E ratio of 108.17.

The average volume for Seagate Technology has been 7,060,700 shares per day over the past 30 days. Seagate Technology has a market cap of $9.7 billion and is part of the computer hardware industry. Shares are down 12.6% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Seagate Technology

as a

hold

. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and poor profit margins.

Highlights from the ratings report include:

  • STX, with its decline in revenue, slightly underperformed the industry average of 12.7%. Since the same quarter one year prior, revenues fell by 22.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • SEAGATE TECHNOLOGY PLC 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, SEAGATE TECHNOLOGY PLC increased its bottom line by earning $5.22 versus $4.52 in the prior year. For the next year, the market is expecting a contraction of 58.2% in earnings ($2.18 versus $5.22).
  • The debt-to-equity ratio is very high at 2.45 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, STX's quick ratio is somewhat strong at 1.09, demonstrating the ability to handle short-term liquidity needs.
  • 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 Computers & Peripherals industry. The net income has significantly decreased by 106.9% when compared to the same quarter one year ago, falling from $291.00 million to -$20.00 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 35.11%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 107.95% compared to the year-earlier 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.

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