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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."

Semgroup

Dividend Yield: 6.10%

Semgroup

(NYSE:

SEMG

) shares currently have a dividend yield of 6.10%.

SemGroup Corporation provides gathering, transportation, storage, distribution, marketing, and other midstream services for producers, refiners of petroleum products, and other market participants. The company has a P/E ratio of 95.16.

The average volume for Semgroup has been 584,700 shares per day over the past 30 days. Semgroup has a market cap of $1.3 billion and is part of the energy industry. Shares are up 10.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Semgroup

TheStreet Recommends

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 24.6%. 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.
  • Net operating cash flow has significantly increased by 156.36% to $47.54 million when compared to the same quarter last year. In addition, SEMGROUP CORP has also vastly surpassed the industry average cash flow growth rate of -49.05%.
  • SEMGROUP CORP 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. 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, SEMGROUP CORP increased its bottom line by earning $0.69 versus $0.64 in the prior year. For the next year, the market is expecting a contraction of 105.8% in earnings (-$0.04 versus $0.69).
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 1141.5% when compared to the same quarter one year ago, falling from $1.47 million to -$15.27 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 65.20%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1266.66% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, SEMG is still more expensive than most of the other companies in its industry.

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CBL & Associates Properties

Dividend Yield: 19.30%

CBL & Associates Properties

(NYSE:

CBL

) shares currently have a dividend yield of 19.30%.

CBL & Associates Properties, Inc. is a public real estate investment trust. It engages in acquisition, development, and management of properties. The fund invests in the real estate markets of United States. Its portfolio consists of enclosed malls and open-air centers. The company has a P/E ratio of 30.74.

The average volume for CBL & Associates Properties has been 1,922,400 shares per day over the past 30 days. CBL & Associates Properties has a market cap of $1.6 billion and is part of the real estate industry. Shares are down 22.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

CBL & Associates Properties

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, 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 weak operating cash flow.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.9%. Since the same quarter one year prior, revenues rose by 11.5%. 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.
  • 38.45% is the gross profit margin for CBL & ASSOCIATES PPTYS INC which we consider to be strong. Regardless of CBL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CBL's net profit margin of 13.54% is significantly lower than the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Real Estate Investment Trusts (REITs) industry average. The net income has decreased by 13.2% when compared to the same quarter one year ago, dropping from $46.16 million to $40.07 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, CBL & ASSOCIATES PPTYS INC's return on equity is below that of both the industry average and the S&P 500.

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Gap

Dividend Yield: 5.10%

Gap

(NYSE:

GPS

) shares currently have a dividend yield of 5.10%.

The Gap, Inc. operates as an apparel retail company worldwide. It offers apparel, accessories, and personal care products for men, women, and children under the Gap, Banana Republic, Old Navy, Athleta, and Intermix brands. The company has a P/E ratio of 75.54.

The average volume for Gap has been 7,250,500 shares per day over the past 30 days. Gap has a market cap of $7.2 billion and is part of the retail industry. Shares are down 27.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Gap

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 and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and poor profit margins.

Highlights from the ratings report include:

  • The debt-to-equity ratio is somewhat low, currently at 0.69, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • GPS, with its decline in revenue, underperformed when compared the industry average of 13.5%. Since the same quarter one year prior, revenues slightly dropped by 6.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for GAP INC is currently lower than what is desirable, coming in at 33.83%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.69% trails that of the industry average.
  • Net operating cash flow has decreased to $168.00 million or 20.37% 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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