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."

Navient

Dividend Yield: 5.30%

Navient

(NASDAQ:

NAVI

) shares currently have a dividend yield of 5.30%.

Navient Corporation provides financial products and services in the United States. The company operates in four segments: FFELP Loans, Private Education Loans, Business Services, and Other. The company has a P/E ratio of 4.87.

The average volume for Navient has been 4,951,500 shares per day over the past 30 days. Navient has a market cap of $4.4 billion and is part of the financial services industry. Shares are down 44.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Navient

as a

hold

. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, 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 generally higher debt management risk.

Highlights from the ratings report include:

  • The gross profit margin for NAVIENT CORP is currently very high, coming in at 71.49%. Regardless of NAVI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NAVI's net profit margin of 19.14% compares favorably to the industry average.
  • NAVI, with its decline in revenue, slightly underperformed the industry average of 4.2%. Since the same quarter one year prior, revenues slightly dropped by 5.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The debt-to-equity ratio is very high at 33.76 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • Net operating cash flow has decreased to $404.00 million or 19.52% 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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PennyMac Mortgage Investment

Dividend Yield: 11.70%

PennyMac Mortgage Investment

(NYSE:

PMT

) shares currently have a dividend yield of 11.70%.

PennyMac Mortgage Investment Trust, a specialty finance company, invests primarily in residential mortgage loans and mortgage-related assets in the United States. The company operates through two segments, Correspondent Production and Investment Activities. The company has a P/E ratio of 12.41.

The average volume for PennyMac Mortgage Investment has been 854,200 shares per day over the past 30 days. PennyMac Mortgage Investment has a market cap of $1.2 billion and is part of the real estate industry. Shares are down 23.5% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

PennyMac Mortgage Investment

as a

hold

. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and expanding profit margins. 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 disappointing return on equity.

Highlights from the ratings report include:

  • The gross profit margin for PENNYMAC MORTGAGE INVEST TR is rather high; currently it is at 64.47%. Regardless of PMT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PMT's net profit margin of 30.19% compares favorably to the industry average.
  • PMT, with its decline in revenue, slightly underperformed the industry average of 6.1%. Since the same quarter one year prior, revenues slightly dropped by 0.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Real Estate Investment Trusts (REITs) industry average. The net income has significantly decreased by 29.4% when compared to the same quarter one year ago, falling from $54.95 million to $38.81 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, PENNYMAC MORTGAGE INVEST TR's return on equity is below that of both the industry average and the S&P 500.

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Piedmont Office Realty

Dividend Yield: 4.30%

Piedmont Office Realty

(NYSE:

PDM

) shares currently have a dividend yield of 4.30%.

Piedmont Office Realty Trust, Inc. engages in the acquisition and ownership of commercial real estate properties in the United States. Its property portfolio primarily consists of office and industrial buildings, warehouses, and manufacturing facilities. The company has a P/E ratio of 49.87.

The average volume for Piedmont Office Realty has been 1,001,500 shares per day over the past 30 days. Piedmont Office Realty has a market cap of $2.8 billion and is part of the real estate industry. Shares are up 3.5% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Piedmont Office Realty

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth and notable return on equity. However, as a counter to these strengths, 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:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.1%. Since the same quarter one year prior, revenues slightly increased by 3.1%. 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 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, PIEDMONT OFFICE REALTY TRUST's return on equity significantly trails that of both the industry average and the S&P 500.
  • PIEDMONT OFFICE REALTY TRUST 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, PIEDMONT OFFICE REALTY TRUST reported lower earnings of $0.27 versus $0.43 in the prior year. This year, the market expects an improvement in earnings ($0.35 versus $0.27).
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 120.5% when compared to the same quarter one year ago, falling from $9.16 million to -$1.88 million.
  • The gross profit margin for PIEDMONT OFFICE REALTY TRUST is currently extremely low, coming in at 5.37%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -1.25% is significantly below that of the industry average.

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