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: 13.20%

NuStar GP Holdings

(NYSE:

NSH

) shares currently have a dividend yield of 13.20%.

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 9.81.

The average volume for NuStar GP Holdings has been 233,900 shares per day over the past 30 days. NuStar GP Holdings has a market cap of $707.2 million and is part of the energy industry. Shares are down 20.5% year-to-date as of the close of trading on Friday.

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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 33.0%. 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. Despite the mixed results of the gross profit margin, NSH's net profit margin of 74.52% significantly outperformed against the industry.
  • 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 14.0% in earnings ($1.45 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 55.15%, 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. 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.

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JMP Group

Dividend Yield: 9.50%

JMP Group

(NYSE:

JMP

) shares currently have a dividend yield of 9.50%.

JMP Group LLC, together with its subsidiaries, provides investment banking and asset management services in the United States. The company operates through Broker-Dealer, Asset Management, and Corporate Credit segments. The company has a P/E ratio of 9.18.

The average volume for JMP Group has been 70,600 shares per day over the past 30 days. JMP Group has a market cap of $107.3 million and is part of the financial services industry. Shares are down 7.3% year-to-date as of the close of trading on Friday.

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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:

  • JMP, with its decline in revenue, underperformed when compared the industry average of 4.2%. 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 ($0.50 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 31.39%, 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 on the basis of return on equity, JMP GROUP LLC underperformed against that of the industry average and is significantly less than that of 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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Monroe Capital

Dividend Yield: 11.50%

Monroe Capital

(NASDAQ:

MRCC

) shares currently have a dividend yield of 11.50%.

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 9.87.

The average volume for Monroe Capital has been 69,500 shares per day over the past 30 days. Monroe Capital has a market cap of $156.2 million and is part of the real estate industry. Shares are down 7.9% year-to-date as of the close of trading on Friday.

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

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 4.2%. 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 ($1.63 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. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, MONROE CAPITAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • MRCC has underperformed the S&P 500 Index, declining 17.98% from its price level of one year ago. 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 -$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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