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."

Oxbridge Re Holdings

Dividend Yield: 9.60%

Oxbridge Re Holdings

(NASDAQ:

OXBR

) shares currently have a dividend yield of 9.60%.

Oxbridge Re Holdings Limited provides reinsurance business solutions primarily to property and casualty insurers in the Gulf Coast region of the United States. It writes collateralized policies to cover property losses from specified catastrophes. The company has a P/E ratio of 4.92.

The average volume for Oxbridge Re Holdings has been 6,400 shares per day over the past 30 days. Oxbridge Re Holdings has a market cap of $30.4 million and is part of the insurance industry. Shares are down 12.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Oxbridge Re Holdings

as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • OXBR has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
  • 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 Insurance industry and the overall market, OXBRIDGE RE HOLDINGS LTD's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for OXBRIDGE RE HOLDINGS LTD is currently very high, coming in at 92.80%. Regardless of OXBR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OXBR's net profit margin of 62.88% significantly outperformed against the industry.
  • Net operating cash flow has decreased to $3.98 million or 35.40% when compared to the same quarter last year. Despite a decrease in cash flow of 35.40%, OXBRIDGE RE HOLDINGS LTD is in line with the industry average cash flow growth rate of -36.54%.
  • 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 Insurance industry. The net income has significantly decreased by 46.1% when compared to the same quarter one year ago, falling from $1.38 million to $0.74 million.

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Stage Stores

Dividend Yield: 7.30%

Stage Stores

(NYSE:

SSI

) shares currently have a dividend yield of 7.30%.

Stage Stores, Inc. operates as a specialty department store retailer in small and mid-sized towns and communities in the United States. Its merchandise portfolio comprises moderately priced brand name and private label apparel, accessories, cosmetics, footwear, and home goods. The company has a P/E ratio of 15.45.

The average volume for Stage Stores has been 657,500 shares per day over the past 30 days. Stage Stores has a market cap of $249.7 million and is part of the retail industry. Shares are down 9.4% year-to-date as of the close of trading on Thursday.

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TheStreet Recommends

TheStreet Ratings rates

Stage Stores

as a

hold

. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.11 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • SSI, with its decline in revenue, underperformed when compared the industry average of 9.6%. Since the same quarter one year prior, revenues slightly dropped by 4.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • STAGE STORES INC's earnings per share declined by 47.8% in the most recent quarter compared to 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, STAGE STORES INC reported lower earnings of $0.17 versus $1.17 in the prior year. This year, the market expects an improvement in earnings ($0.46 versus $0.17).
  • The gross profit margin for STAGE STORES INC is currently lower than what is desirable, coming in at 31.88%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.17% trails that of the industry average.
  • Net operating cash flow has decreased to $71.13 million or 33.26% 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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Evolving Systems

Dividend Yield: 8.30%

Evolving Systems

(NASDAQ:

EVOL

) shares currently have a dividend yield of 8.30%.

Evolving Systems, Inc. provides software solutions and services to the wireless, wireline, and cable markets in the United Kingdom, Nigeria, Mexico, and internationally. The company has a P/E ratio of 20.89.

The average volume for Evolving Systems has been 24,100 shares per day over the past 30 days. Evolving Systems has a market cap of $62.4 million and is part of the computer software & services industry. Shares are up 5.5% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Evolving Systems

as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable 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:

  • The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, EVOL has a quick ratio of 1.84, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has slightly increased to -$0.24 million or 5.42% when compared to the same quarter last year. Despite an increase in cash flow, EVOLVING SYSTEMS INC's cash flow growth rate is still lower than the industry average growth rate of 26.53%.
  • 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 Software industry. The net income has significantly decreased by 66.0% when compared to the same quarter one year ago, falling from $1.68 million to $0.57 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Software industry and the overall market, EVOLVING SYSTEMS INC's return on equity is below that of both the industry average and the S&P 500.

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