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."

HollyFrontier

Dividend Yield: 5.70%

HollyFrontier

(NYSE:

HFC

) shares currently have a dividend yield of 5.70%.

HollyFrontier Corporation operates as an independent petroleum refiner in the United States. The company operates in two segments, Refining and HEP. The company has a P/E ratio of 8.13.

The average volume for HollyFrontier has been 3,534,400 shares per day over the past 30 days. HollyFrontier has a market cap of $4.1 billion and is part of the energy industry. Shares are down 38.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

HollyFrontier

as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • HFC's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that HFC's debt-to-equity ratio is low, the quick ratio, which is currently 0.65, displays a potential problem in covering short-term cash needs.
  • The gross profit margin for HOLLYFRONTIER CORP is currently extremely low, coming in at 9.76%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.05% trails that of the industry average.
  • Net operating cash flow has significantly decreased to $6.64 million or 97.31% 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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Blackstone Group

Dividend Yield: 4.60%

Blackstone Group

(NYSE:

BX

) shares currently have a dividend yield of 4.60%.

The Blackstone Group L.P. is a publicly owned investment manager. The firm also provides financial advisory services to its clients. It provides its services to public and corporate pension funds, academic, cultural, and charitable organizations. The company has a P/E ratio of 14.54.

The average volume for Blackstone Group has been 4,261,500 shares per day over the past 30 days. Blackstone Group has a market cap of $29.3 billion and is part of the financial services industry. Shares are down 15.2% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Blackstone Group

as a

hold

. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and premium valuation.

Highlights from the ratings report include:

  • 40.20% is the gross profit margin for BLACKSTONE GROUP LP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 16.09% trails the industry average.
  • BX, with its very weak revenue results, has greatly underperformed against the industry average of 23.7%. Since the same quarter one year prior, revenues plummeted by 62.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • BLACKSTONE GROUP LP 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. 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, BLACKSTONE GROUP LP reported lower earnings of $1.04 versus $2.59 in the prior year. This year, the market expects an improvement in earnings ($2.36 versus $1.04).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Capital Markets industry and the overall market, BLACKSTONE GROUP LP's return on equity is below that of both the industry average and the S&P 500.

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Ternium

Dividend Yield: 4.30%

Ternium

(NYSE:

TX

) shares currently have a dividend yield of 4.30%.

Ternium S.A. manufactures and processes various steel products in Mexico, Argentina, Bolivia, Chile, Paraguay, Uruguay, the United States, Central America, Colombia, and internationally. It operates through two segments, Steel and Mining. The company has a P/E ratio of 15.08.

The average volume for Ternium has been 427,300 shares per day over the past 30 days. Ternium has a market cap of $4.1 billion and is part of the metals & mining industry. Shares are up 71% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Ternium

as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.

Highlights from the ratings report include:

  • 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. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • TERNIUM SA -ADR has improved earnings per share by 37.1% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TERNIUM SA -ADR turned its bottom line around by earning $0.05 versus -$1.01 in the prior year. This year, the market expects an improvement in earnings ($2.06 versus $0.05).
  • The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that TX's debt-to-equity ratio is low, the quick ratio, which is currently 0.60, displays a potential problem in covering short-term cash needs.
  • The gross profit margin for TERNIUM SA -ADR is currently lower than what is desirable, coming in at 27.59%. Regardless of TX's low profit margin, it has managed to increase from the same period last year.
  • Net operating cash flow has decreased to $237.42 million or 26.67% 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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