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."

Franklin Street Properties

Dividend Yield: 7.10%

Franklin Street Properties

(AMEX:

FSP

) shares currently have a dividend yield of 7.10%.

Franklin Street Properties Corp. is a publicly traded hybrid real estate investment trust. The firm invests in the real estate markets of the United States. It primarily engages in property acquisitions and dispositions, short-term financing, leasing, development and asset management. The company has a P/E ratio of 48.32.

The average volume for Franklin Street Properties has been 334,300 shares per day over the past 30 days. Franklin Street Properties has a market cap of $1.1 billion and is part of the real estate industry. Shares are down 13.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Franklin Street Properties

as a

hold

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, notable return on equity 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 and poor profit margins.

Highlights from the ratings report include:

  • Net operating cash flow has increased to $30.66 million or 14.91% when compared to the same quarter last year. Despite an increase in cash flow, FRANKLIN STREET PROPERTIES's average is still marginally south of the industry average growth rate of 15.97%.
  • FRANKLIN STREET PROPERTIES reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FRANKLIN STREET PROPERTIES reported lower earnings of $0.14 versus $0.18 in the prior year. This year, the market expects an improvement in earnings ($0.23 versus $0.14).
  • The gross profit margin for FRANKLIN STREET PROPERTIES is rather low; currently it is at 15.74%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.48% significantly trails the industry average.
  • FSP has underperformed the S&P 500 Index, declining 12.37% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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Capital Product Partners

Dividend Yield: 13.80%

Capital Product Partners

(NASDAQ:

CPLP

) shares currently have a dividend yield of 13.80%.

Capital Product Partners L.P., a shipping company, provides marine transportation services in Greece. The company has a P/E ratio of 21.50.

The average volume for Capital Product Partners has been 463,900 shares per day over the past 30 days. Capital Product Partners has a market cap of $716.1 million and is part of the transportation industry. Shares are down 14.4% year-to-date as of the close of trading on Friday.

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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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.

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 rose by 14.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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. To add to this, CPLP has a quick ratio of 2.30, which demonstrates the ability of the company to cover short-term liquidity needs.
  • CAPITAL PRODUCT PARTNERS LP reported significant earnings per share improvement 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 37.40%, 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • 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. 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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BreitBurn Energy Partners

Dividend Yield: 19.00%

BreitBurn Energy Partners

(NASDAQ:

BBEP

) shares currently have a dividend yield of 19.00%.

Breitburn Energy Partners LP, an independent oil and gas partnership, acquires, exploits, and develops oil, natural gas liquids (NGLs), and natural gas properties in the United States. The company has a P/E ratio of 1.17.

The average volume for BreitBurn Energy Partners has been 2,308,800 shares per day over the past 30 days. BreitBurn Energy Partners has a market cap of $556.8 million and is part of the energy industry. Shares are down 58.6% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

BreitBurn Energy Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, 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 unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.

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 rose by 10.3%. 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 debt-to-equity ratio is somewhat low, currently at 0.85, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 88.32%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 64.04% compared to the year-earlier 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.
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 191.9% when compared to the same quarter one year ago, falling from -$104.73 million to -$305.71 million.

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