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."

DineEquity

Dividend Yield: 4.50%

DineEquity

(NYSE:

DIN

) shares currently have a dividend yield of 4.50%.

DineEquity, Inc., together with its subsidiaries, owns, franchises, and operates full-service restaurants in the United States and internationally. The company has a P/E ratio of 27.28.

The average volume for DineEquity has been 169,400 shares per day over the past 30 days. DineEquity has a market cap of $1.5 billion and is part of the leisure industry. Shares are down 4.4% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

DineEquity

as a

hold

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

Highlights from the ratings report include:

  • 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 Hotels, Restaurants & Leisure industry average. The net income increased by 28.4% when compared to the same quarter one year prior, rising from $18.89 million to $24.26 million.
  • The gross profit margin for DINEEQUITY INC is rather high; currently it is at 63.08%. 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 14.93% trails the industry average.
  • DINEEQUITY INC has improved earnings per share by 29.3% 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, DINEEQUITY INC reported lower earnings of $1.89 versus $3.71 in the prior year. This year, the market expects an improvement in earnings ($5.92 versus $1.89).
  • DIN'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 25.51%, 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 significantly decreased to $22.47 million or 51.61% 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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Nu Skin

Dividend Yield: 4.40%

Nu Skin

(NYSE:

NUS

) shares currently have a dividend yield of 4.40%.

Nu Skin Enterprises, Inc. develops and distributes anti-aging personal care products and nutritional supplements under the Nu Skin and Pharmanex brands worldwide. The company has a P/E ratio of 13.24.

The average volume for Nu Skin has been 1,215,300 shares per day over the past 30 days. Nu Skin has a market cap of $1.8 billion and is part of the consumer non-durables industry. Shares are down 18.5% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Nu Skin

as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations 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 a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 145.06% to $82.36 million when compared to the same quarter last year. In addition, NU SKIN ENTERPRISES has also vastly surpassed the industry average cash flow growth rate of -65.52%.
  • NUS's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.86 is somewhat weak and could be cause for future problems.
  • NU SKIN ENTERPRISES 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, NU SKIN ENTERPRISES reported lower earnings of $3.11 versus $5.94 in the prior year. For the next year, the market is expecting a contraction of 7.1% in earnings ($2.89 versus $3.11).
  • 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 Personal Products industry. The net income has significantly decreased by 76.2% when compared to the same quarter one year ago, falling from $68.31 million to $16.27 million.

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Vector Group

Dividend Yield: 7.00%

Vector Group

(NYSE:

VGR

) shares currently have a dividend yield of 7.00%.

Vector Group Ltd., through its subsidiaries, primarily manufactures and sells cigarettes in the United States. The company operates through Tobacco, E-Cigarettes, and Real Estate segments. The company has a P/E ratio of 44.17.

The average volume for Vector Group has been 676,300 shares per day over the past 30 days. Vector Group has a market cap of $2.8 billion and is part of the tobacco industry. Shares are down 4% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Vector Group

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we find that net income has been generally deteriorating over time.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 14.4%. Since the same quarter one year prior, revenues rose by 10.9%. 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.
  • Net operating cash flow has increased to $56.13 million or 21.89% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.49%.
  • VECTOR GROUP LTD's earnings per share declined by 25.0% 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, VECTOR GROUP LTD increased its bottom line by earning $0.34 versus $0.30 in the prior year. This year, the market expects an improvement in earnings ($0.64 versus $0.34).
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Tobacco industry average. The net income has decreased by 18.0% when compared to the same quarter one year ago, dropping from $14.88 million to $12.21 million.

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