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."

NuStar GP Holdings

Dividend Yield: 13.40%

NuStar GP Holdings

(NYSE:

NSH

) shares currently have a dividend yield of 13.40%.

NuStar GP Holdings, LLC, through its ownership interests in NuStar Energy L.P., engages in the transportation of petroleum products and anhydrous ammonia; terminalling and storage of petroleum products; and marketing of petroleum products. The company has a P/E ratio of 9.67.

The average volume for NuStar GP Holdings has been 240,000 shares per day over the past 30 days. NuStar GP Holdings has a market cap of $697.4 million and is part of the energy industry. Shares are down 25.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

NuStar GP Holdings

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. 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 36.8%. 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, displayed by a decline in earnings per share.
  • The gross profit margin for NUSTAR GP HOLDINGS LLC is currently very high, coming in at 100.00%. NSH has managed to maintain the strong profit margin since the same quarter of last year.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 9.8% when compared to the same quarter one year ago, dropping from $14.37 million to $12.96 million.
  • NUSTAR GP HOLDINGS LLC's earnings per share declined by 11.8% 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, NUSTAR GP HOLDINGS LLC increased its bottom line by earning $1.68 versus $1.44 in the prior year. For the next year, the market is expecting a contraction of 9.6% in earnings ($1.52 versus $1.68).
  • Looking at the price performance of NSH's shares over the past 12 months, there is not much good news to report: the stock is down 54.51%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.

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Arbor Realty

Dividend Yield: 9.20%

Arbor Realty

(NYSE:

ABR

) shares currently have a dividend yield of 9.20%.

Arbor Realty Trust, Inc., a specialized real estate finance company, invests in various structured finance investments. The company has a P/E ratio of 7.24.

The average volume for Arbor Realty has been 134,700 shares per day over the past 30 days. Arbor Realty has a market cap of $332.3 million and is part of the real estate industry. Shares are down 10.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Arbor Realty

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity 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 5.6%. Since the same quarter one year prior, revenues slightly increased by 2.8%. 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 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 73.6% when compared to the same quarter one year ago, falling from $65.29 million to $17.23 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, ARBOR REALTY TRUST INC's return on equity is below that of both the industry average and the S&P 500.

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Manning & Napier

Dividend Yield: 7.90%

Manning & Napier

(NYSE:

MN

) shares currently have a dividend yield of 7.90%.

Manning & Napier, Inc is publicly owned investment manager. It provides its services to net worth individuals and institutions, including 401(k) plans, pension plans, taft-hartley plans, endowments and foundations. The firm manages separate client-focused equity and fixed income portfolios. The company has a P/E ratio of 6.30.

The average volume for Manning & Napier has been 65,900 shares per day over the past 30 days. Manning & Napier has a market cap of $120.1 million and is part of the financial services industry. Shares are down 9.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Manning & Napier

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 also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:

  • MANNING & NAPIER INC 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MANNING & NAPIER INC increased its bottom line by earning $0.67 versus $0.20 in the prior year. This year, the market expects an improvement in earnings ($0.93 versus $0.67).
  • 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 727.6% when compared to the same quarter one year prior, rising from $0.43 million to $3.54 million.
  • 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 Capital Markets industry and the overall market on the basis of return on equity, MANNING & NAPIER INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • MN'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 31.11%, 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Net operating cash flow has decreased to $28.34 million or 26.10% when compared to the same quarter last year. Despite a decrease in cash flow MANNING & NAPIER INC is still fairing well by exceeding its industry average cash flow growth rate of -52.93%.

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