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."

Sabine Royalty

Dividend Yield: 7.20%

Sabine Royalty

(NYSE:

SBR

) shares currently have a dividend yield of 7.20%.

Sabine Royalty Trust holds royalty and mineral interests in various oil and gas properties in the United States. The company has a P/E ratio of 7.68.

The average volume for Sabine Royalty has been 44,200 shares per day over the past 30 days. Sabine Royalty has a market cap of $466.0 million and is part of the financial services industry. Shares are down 11.1% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Sabine Royalty

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 a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • SBR 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. Along with this, the company maintains a quick ratio of 2.85, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SABINE ROYALTY TRUST's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Despite the weak revenue results, SBR has outperformed against the industry average of 36.9%. Since the same quarter one year prior, revenues fell by 26.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • SABINE ROYALTY TRUST's earnings per share declined by 27.6% in the most recent quarter compared to the same quarter a year ago. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, SABINE ROYALTY TRUST's EPS of $4.03 remained unchanged from the prior years' EPS of $4.03.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 37.08%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 27.64% 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.

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Harte-Hanks

Dividend Yield: 9.60%

Harte-Hanks

(NYSE:

HHS

) shares currently have a dividend yield of 9.60%.

Harte-Hanks, Inc. provides various marketing services in the United States and internationally. The company operates in two segments, Customer Interaction and Trillium Software.

The average volume for Harte-Hanks has been 326,400 shares per day over the past 30 days. Harte-Hanks has a market cap of $218.3 million and is part of the media industry. Shares are down 52.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Harte-Hanks

as a

hold

. The company's strongest point has been its expanding profit margins. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • HHS, with its decline in revenue, underperformed when compared the industry average of 6.5%. Since the same quarter one year prior, revenues slightly dropped by 9.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 48.72%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 2870.00% 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.
  • HARTE HANKS INC 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. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, HARTE HANKS INC reported lower earnings of $0.38 versus $0.39 in the prior year. For the next year, the market is expecting a contraction of 31.6% in earnings ($0.26 versus $0.38).
  • 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 Media industry. The net income has significantly decreased by 2762.2% when compared to the same quarter one year ago, falling from $6.42 million to -$170.92 million.
  • The gross profit margin for HARTE HANKS INC is rather low; currently it is at 17.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -140.13% is significantly below that of the industry average.

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Arlington Asset Investment

Dividend Yield: 17.80%

Arlington Asset Investment

(NYSE:

AI

) shares currently have a dividend yield of 17.80%.

Arlington Asset Investment Corp., an investment firm, acquires mortgage-related and other assets.

The average volume for Arlington Asset Investment has been 289,600 shares per day over the past 30 days. Arlington Asset Investment has a market cap of $322.5 million and is part of the real estate industry. Shares are down 48.6% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Arlington Asset Investment

as a

hold

. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, 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 gross profit margin for ARLINGTON ASSET INVESTMENT is currently very high, coming in at 111.30%. It has increased significantly from the same period last year. Along with this, the net profit margin of 183.23% significantly outperformed against the industry average.
  • AI, with its very weak revenue results, has greatly underperformed against the industry average of 6.3%. Since the same quarter one year prior, revenues plummeted by 209.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ARLINGTON ASSET INVESTMENT 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, ARLINGTON ASSET INVESTMENT reported lower earnings of $0.53 versus $2.96 in the prior year. This year, the market expects an improvement in earnings ($5.75 versus $0.53).
  • 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 Capital Markets industry. The net income has significantly decreased by 509.7% when compared to the same quarter one year ago, falling from $12.85 million to -$52.63 million.
  • 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, ARLINGTON ASSET INVESTMENT's return on equity significantly trails that of both the industry average and the S&P 500.

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