Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer

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."

Potash Corp of Saskatchewan

Dividend Yield: 5.60%

Potash Corp of Saskatchewan

(NYSE:

POT

) shares currently have a dividend yield of 5.60%.

Potash Corporation of Saskatchewan Inc., together with its subsidiaries, produces and sells fertilizers and related industrial and feed products worldwide. The company operates in three segments: Potash, Nitrogen, and Phosphate. The company has a P/E ratio of 14.95.

The average volume for Potash Corp of Saskatchewan has been 4,384,700 shares per day over the past 30 days. Potash Corp of Saskatchewan has a market cap of $22.6 billion and is part of the chemicals industry. Shares are down 23.1% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Potash Corp of Saskatchewan

as a

hold

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

Highlights from the ratings report include:

  • 45.87% is the gross profit margin for POTASH CORP SASK INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.09% significantly outperformed against the industry average.
  • Net operating cash flow has slightly increased to $836.00 million or 6.09% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -16.51%.
  • The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.75 is somewhat weak and could be cause for future problems.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, POT has underperformed the S&P 500 Index, declining 24.94% from its price level of one year ago. 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.
  • POTASH CORP SASK INC's earnings per share declined by 10.7% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, POTASH CORP SASK INC reported lower earnings of $1.83 versus $2.03 in the prior year. For the next year, the market is expecting a contraction of 0.3% in earnings ($1.83 versus $1.83).

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Lexington Realty

Dividend Yield: 7.90%

Lexington Realty

(NYSE:

LXP

) shares currently have a dividend yield of 7.90%.

Lexington Corporate Properties Trust operates as a self-managed and self-administered real estate investment trust (REIT). The company acquires, owns, and manages a portfolio of office, industrial, and retail properties net-leased to corporate tenants in the United States. The company has a P/E ratio of 28.73.

The average volume for Lexington Realty has been 1,647,500 shares per day over the past 30 days. Lexington Realty has a market cap of $2.0 billion and is part of the real estate industry. Shares are down 21.7% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Lexington Realty

as a

hold

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

  • LEXINGTON REALTY TRUST has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. 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, LEXINGTON REALTY TRUST turned its bottom line around by earning $0.17 versus -$0.18 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus $0.17).
  • 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 3681.6% when compared to the same quarter one year prior, rising from $0.89 million to $33.51 million.
  • 39.59% is the gross profit margin for LEXINGTON REALTY TRUST which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 30.75% trails the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, LEXINGTON REALTY TRUST's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $57.92 million or 3.37% when compared to the same quarter last year. Despite a decrease in cash flow of 3.37%, LEXINGTON REALTY TRUST is still significantly exceeding the industry average of -70.48%.

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Cogent Communications Holdings

Dividend Yield: 5.40%

Cogent Communications Holdings

(NASDAQ:

CCOI

) shares currently have a dividend yield of 5.40%.

Cogent Communications Holdings, Inc., through its subsidiaries, provides high-speed Internet access and Internet protocol communications service.

The average volume for Cogent Communications Holdings has been 557,400 shares per day over the past 30 days. Cogent Communications Holdings has a market cap of $1.4 billion and is part of the telecommunications industry. Shares are down 10.2% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Cogent Communications Holdings

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:

  • CCOI's revenue growth has slightly outpaced the industry average of 4.2%. Since the same quarter one year prior, revenues slightly increased by 4.6%. 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 72.73% to $18.37 million when compared to the same quarter last year. In addition, COGENT COMMUNICATIONS HLDGS has also vastly surpassed the industry average cash flow growth rate of 0.04%.
  • The gross profit margin for COGENT COMMUNICATIONS HLDGS is rather high; currently it is at 57.76%. Regardless of CCOI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CCOI's net profit margin of -1.62% significantly underperformed when compared to the industry average.
  • 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 Diversified Telecommunication Services industry and the overall market, COGENT COMMUNICATIONS HLDGS's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 1368.0% when compared to the same quarter one year ago, falling from $0.13 million to -$1.59 million.

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