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."

Annaly Capital Management

Dividend Yield: 11.70%

Annaly Capital Management

(NYSE:

NLY

) shares currently have a dividend yield of 11.70%.

Annaly Capital Management, Inc. owns a portfolio of real estate related investments in the United States. The company has a P/E ratio of 24.45.

The average volume for Annaly Capital Management has been 9,061,500 shares per day over the past 30 days. Annaly Capital Management has a market cap of $9.5 billion and is part of the real estate industry. Shares are up 9.7% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Annaly Capital Management

as a

hold

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. 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:

  • ANNALY CAPITAL MANAGEMENT reported significant earnings per share improvement 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, ANNALY CAPITAL MANAGEMENT turned its bottom line around by earning $0.42 versus -$0.96 in the prior year. This year, the market expects an improvement in earnings ($1.17 versus $0.42).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 201.8% when compared to the same quarter one year prior, rising from -$658.08 million to $670.04 million.
  • NLY, with its decline in revenue, slightly underperformed the industry average of 7.9%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • After a year of stock price fluctuations, the net result is that NLY's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has significantly decreased to -$0.46 million or 100.03% 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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Ramco-Gershenson Properties

Dividend Yield: 4.60%

Ramco-Gershenson Properties

(NYSE:

RPT

) shares currently have a dividend yield of 4.60%.

Ramco-Gershenson Properties Trust, through its subsidiaries, operates as a real estate investment trust (REIT) in the United States. It engages in the ownership, development, acquisition, management, and leasing of community shopping centers, regional malls, and single tenant retail properties. The company has a P/E ratio of 24.81.

The average volume for Ramco-Gershenson Properties has been 527,200 shares per day over the past 30 days. Ramco-Gershenson Properties has a market cap of $1.4 billion and is part of the real estate industry. Shares are up 7.7% year-to-date as of the close of trading on Tuesday.

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TheStreet Recommends

TheStreet Ratings rates

Ramco-Gershenson Properties

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and reasonable valuation levels. 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:

  • RPT's revenue growth has slightly outpaced the industry average of 7.9%. Since the same quarter one year prior, revenues slightly increased by 8.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • RAMCO-GERSHENSON PROPERTIES reported significant earnings per share improvement 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, RAMCO-GERSHENSON PROPERTIES turned its bottom line around by earning $0.70 versus -$0.12 in the prior year. For the next year, the market is expecting a contraction of 75.7% in earnings ($0.17 versus $0.70).
  • The gross profit margin for RAMCO-GERSHENSON PROPERTIES is currently lower than what is desirable, coming in at 32.36%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 21.27% trails the industry average.
  • Net operating cash flow has decreased to $28.60 million or 13.28% 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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Olin

Dividend Yield: 4.70%

Olin

(NYSE:

OLN

) shares currently have a dividend yield of 4.70%.

Olin Corporation manufactures and distributes chemical products in the United States and internationally. It operates through three segments: Chlor Alkali Products and Vinyls, Epoxy, and Winchester.

The average volume for Olin has been 3,554,700 shares per day over the past 30 days. Olin has a market cap of $2.8 billion and is part of the chemicals industry. Shares are down 2.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Olin

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • OLN's very impressive revenue growth greatly exceeded the industry average of 10.8%. Since the same quarter one year prior, revenues leaped by 153.6%. 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.
  • Net operating cash flow has significantly increased by 70.85% to $102.00 million when compared to the same quarter last year. In addition, OLIN CORP has also vastly surpassed the industry average cash flow growth rate of -9.48%.
  • OLIN CORP 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, OLIN CORP reported lower earnings of $0.40 versus $1.32 in the prior year. This year, the market expects an improvement in earnings ($1.21 versus $0.40).
  • 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 Chemicals industry. The net income has significantly decreased by 589.8% when compared to the same quarter one year ago, falling from $12.80 million to -$62.70 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 45.79%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 343.75% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

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