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."

Golar LNG Partners

Dividend Yield: 15.60%

Golar LNG Partners

(NASDAQ:

GMLP

) shares currently have a dividend yield of 15.60%.

Golar LNG Partners LP owns and operates floating storage regasification units (FSRUs) and liquefied natural gas (LNG) carriers in Brazil, the United Arab Emirates, Indonesia, and Kuwait. As of April 29, 2015, it had a fleet of six FSRUs and four LNG carriers. The company has a P/E ratio of 6.40.

The average volume for Golar LNG Partners has been 494,300 shares per day over the past 30 days. Golar LNG Partners has a market cap of $911.3 million and is part of the transportation industry. Shares are up 8.4% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Golar LNG Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth 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 feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 34.6%. Since the same quarter one year prior, revenues rose by 12.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 55.7% when compared to the same quarter one year prior, rising from $36.72 million to $57.18 million.
  • GOLAR LNG 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, GOLAR LNG PARTNERS LP reported lower earnings of $2.64 versus $2.76 in the prior year. For the next year, the market is expecting a contraction of 7.6% in earnings ($2.44 versus $2.64).
  • GMLP'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 39.51%, 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.

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PennantPark Floating Rate Capital

Dividend Yield: 9.90%

PennantPark Floating Rate Capital

(NASDAQ:

PFLT

) shares currently have a dividend yield of 9.90%.

PennantPark Floating Rate Capital Ltd. is a business development company. It seeks to make secondary direct, debt, equity, and loan investments. The fund seeks to invest through floating rate loans in private or thinly traded or small market-cap, public middle market companies. The company has a P/E ratio of 8.37.

The average volume for PennantPark Floating Rate Capital has been 113,200 shares per day over the past 30 days. PennantPark Floating Rate Capital has a market cap of $308.7 million and is part of the financial services industry. Shares are up 2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

PennantPark Floating Rate Capital

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 4.5%. Since the same quarter one year prior, revenues rose by 17.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 298.9% when compared to the same quarter one year prior, rising from $0.44 million to $1.75 million.
  • PENNANTPARK FLOATING RT CAP 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, PENNANTPARK FLOATING RT CAP reported lower earnings of $0.82 versus $1.38 in the prior year. This year, the market expects an improvement in earnings ($1.03 versus $0.82).
  • 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 Capital Markets industry and the overall market, PENNANTPARK FLOATING RT CAP's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$66.48 million or 645.14% 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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Terra Nitrogen

Dividend Yield: 10.90%

Terra Nitrogen

(NYSE:

TNH

) shares currently have a dividend yield of 10.90%.

Terra Nitrogen Company, L.P. produces nitrogen fertilizer products in the United States. It primarily offers anhydrous ammonia and urea ammonium nitrate solutions for farmers to improve the yield and quality of their crops. The company has a P/E ratio of 10.51.

The average volume for Terra Nitrogen has been 36,400 shares per day over the past 30 days. Terra Nitrogen has a market cap of $2.0 billion and is part of the chemicals industry. Shares are up 3.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Terra Nitrogen

as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. 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:

  • TNH has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.68, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for TERRA NITROGEN CO -LP is rather high; currently it is at 54.86%. Regardless of TNH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TNH's net profit margin of 52.34% significantly outperformed against the industry.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.8%. Since the same quarter one year prior, revenues slightly dropped by 9.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • TERRA NITROGEN CO -LP's earnings per share declined by 18.4% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, TERRA NITROGEN CO -LP reported lower earnings of $10.06 versus $12.07 in the prior year.
  • 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 Chemicals industry average. The net income has decreased by 16.6% when compared to the same quarter one year ago, dropping from $95.00 million to $79.20 million.

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