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."

GameStop

Dividend Yield: 4.80%

GameStop

(NYSE:

GME

) shares currently have a dividend yield of 4.80%.

GameStop Corp. operates as an omnichannel video game retailer. The company has a P/E ratio of 8.00.

The average volume for GameStop has been 2,931,100 shares per day over the past 30 days. GameStop has a market cap of $3.2 billion and is part of the retail industry. Shares are up 10.1% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

GameStop

as a

hold

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

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.45 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 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 the Specialty Retail industry average. The net income has decreased by 10.8% when compared to the same quarter one year ago, dropping from $73.80 million to $65.80 million.
  • Net operating cash flow has significantly decreased to -$376.10 million or 192.45% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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Colony Capital

Dividend Yield: 9.20%

Colony Capital

(NYSE:

CLNY

) shares currently have a dividend yield of 9.20%.

Colony Capital, Inc. is a real estate investment trust. The firm invests in the real estate markets of North America and Europe. The company has a P/E ratio of 15.88.

The average volume for Colony Capital has been 1,948,800 shares per day over the past 30 days. Colony Capital has a market cap of $2.0 billion and is part of the real estate industry. Shares are down 11.8% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Colony Capital

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including poor profit margins, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • CLNY's very impressive revenue growth greatly exceeded the industry average of 12.1%. Since the same quarter one year prior, revenues leaped by 74.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CLNY'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 25.64%, 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.
  • The gross profit margin for COLONY CAPITAL INC is currently lower than what is desirable, coming in at 33.72%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 14.76% significantly trails the industry average.

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Senior Housing Properties

Dividend Yield: 7.10%

Senior Housing Properties

(NASDAQ:

SNH

) shares currently have a dividend yield of 7.10%.

Senior Housing Properties Trust, a real estate investment trust (REIT), primarily invests in senior housing properties in the United States. The trust invests in hospitals, nursing homes, senior apartments, independent living properties, and assisted living properties. The company has a P/E ratio of 44.78.

The average volume for Senior Housing Properties has been 1,894,100 shares per day over the past 30 days. Senior Housing Properties has a market cap of $5.2 billion and is part of the real estate industry. Shares are up 46.6% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Senior Housing Properties

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • SNH's revenue growth has slightly outpaced the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 13.0%. 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.
  • Compared to its closing price of one year ago, SNH's share price has jumped by 26.51%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • 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, SENIOR HOUSING PPTYS TRUST's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for SENIOR HOUSING PPTYS TRUST is currently lower than what is desirable, coming in at 31.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 12.09% significantly trails the industry average.

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