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."

Monroe Capital

Dividend Yield: 10.10%

Monroe Capital

(NASDAQ:

MRCC

) shares currently have a dividend yield of 10.10%.

Monroe Capital Corporation is a business development company specializing in senior, unitranche and junior secured debt and, to a lesser extent, unsecured debt and equity investments in middle-market companies. The fund focuses on companies with a maximum of $25 million in EBITDA per year. The company has a P/E ratio of 11.31.

The average volume for Monroe Capital has been 64,300 shares per day over the past 30 days. Monroe Capital has a market cap of $180.9 million and is part of the real estate industry. Shares are up 5.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Monroe Capital

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and compelling growth in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 19.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MONROE CAPITAL CORP has improved earnings per share by 8.6% 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MONROE CAPITAL CORP increased its bottom line by earning $1.45 versus $1.38 in the prior year. This year, the market expects an improvement in earnings ($1.59 versus $1.45).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Capital Markets industry and the overall market, MONROE CAPITAL CORP'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 -$60.19 million or 556.81% 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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Banco Santander Brasil SA/Brazil

Dividend Yield: 9.00%

Banco Santander Brasil SA/Brazil

(NYSE:

BSBR

) shares currently have a dividend yield of 9.00%.

Banco Santander (Brasil) S.A. provides banking products and services in Brazil and internationally. The company offers commercial banking, investment, mortgage, leasing, credit card, and foreign exchange services, as well as various lending and financing services.

The average volume for Banco Santander Brasil SA/Brazil has been 1,861,900 shares per day over the past 30 days. Banco Santander Brasil SA/Brazil has a market cap of $35.9 billion and is part of the banking industry. Shares are up 22.4% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Banco Santander Brasil SA/Brazil

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and good cash flow from operations. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 5.5%. Since the same quarter one year prior, revenues slightly increased by 5.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Commercial Banks industry and the overall market, BANCO SANTANDER BRASIL -ADR's return on equity exceeds that of both the industry average and the S&P 500.
  • 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. 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.
  • BANCO SANTANDER BRASIL -ADR reported flat earnings per share in the most recent quarter. 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, BANCO SANTANDER BRASIL -ADR increased its bottom line by earning $0.64 versus $0.56 in the prior year. For the next year, the market is expecting a contraction of 43.8% in earnings ($0.36 versus $0.64).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Commercial Banks industry average. The net income has decreased by 3.0% when compared to the same quarter one year ago, dropping from $395.61 million to $383.64 million.

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JMP Group

Dividend Yield: 9.40%

JMP Group

(NYSE:

JMP

) shares currently have a dividend yield of 9.40%.

JMP Group LLC, together with its subsidiaries, provides investment banking and asset management services in the United States. It operates through Broker-Dealer, Asset Management, and Corporate Credit Management segments.

The average volume for JMP Group has been 62,700 shares per day over the past 30 days. JMP Group has a market cap of $107.9 million and is part of the financial services industry. Shares are down 7.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

JMP Group

as a

hold

. The company's strongest point has been its very decent return on equity which we feel should persist. At the same time, however, we also find weaknesses including deteriorating net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The revenue fell significantly faster than the industry average of 1.9%. Since the same quarter one year prior, revenues fell by 32.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • JMP GROUP LLC 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, JMP GROUP LLC swung to a loss, reporting -$0.03 versus $0.56 in the prior year. This year, the market expects an improvement in earnings ($0.52 versus -$0.03).
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 39.17%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 125.00% 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.
  • 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. Compared to other companies in the Capital Markets industry and the overall market, JMP GROUP LLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for JMP GROUP LLC is currently extremely low, coming in at 12.05%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -2.85% is significantly below that of the industry average.

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