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."

Shaw Communications

Dividend Yield: 4.90%

Shaw Communications

(NYSE:

SJR

) shares currently have a dividend yield of 4.90%.

Shaw Communications Inc., together with its subsidiaries, provides broadband cable television, Internet, digital phone, telecommunication, direct-to-home satellite, satellite distribution, and programming content services to residential and business customers in Canada and the United States. The company has a P/E ratio of 12.92.

The average volume for Shaw Communications has been 511,200 shares per day over the past 30 days. Shaw Communications has a market cap of $8.4 billion and is part of the media industry. Shares are up 0.7% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Shaw Communications

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.9%. Since the same quarter one year prior, revenues slightly increased by 2.1%. 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.
  • Looking at the price performance of SJR's shares over the past 12 months, there is not much good news to report: the stock is down 25.99%, 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. 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.
  • SHAW COMMUNICATIONS INC's earnings per share declined by 6.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, SHAW COMMUNICATIONS INC reported lower earnings of $1.79 versus $1.84 in the prior year.

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Canon

Dividend Yield: 4.50%

Canon

(NYSE:

CAJ

) shares currently have a dividend yield of 4.50%.

Canon Inc. manufactures and sells office multifunction devices (MFDs), plain paper copying machines, laser printers, inkjet printers, cameras, and lithography equipment. The company has a P/E ratio of 11.42.

The average volume for Canon has been 345,600 shares per day over the past 30 days. Canon has a market cap of $30.5 billion and is part of the consumer durables industry. Shares are down 6.6% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Canon

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 2.7%. Since the same quarter one year prior, revenues rose by 26.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CAJ's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • CANON INC has improved earnings per share by 33.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CANON INC reported lower earnings of $1.67 versus $1.91 in the prior year. This year, the market expects an improvement in earnings ($1.84 versus $1.67).
  • CAJ is off 11.15% from its price level of one year ago, reflecting the general market trend and ignoring their higher earnings per share compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • 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. In comparison to the other companies in the Computers & Peripherals industry and the overall market, CANON INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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Medical Properties

Dividend Yield: 7.80%

Medical Properties

(NYSE:

MPW

) shares currently have a dividend yield of 7.80%.

Medical Properties Trust, Inc. operates as a real estate investment trust (REIT) in the United States. It acquires, develops, and invests in healthcare facilities; and leases healthcare facilities to healthcare operating companies and healthcare providers. The company has a P/E ratio of 24.39.

The average volume for Medical Properties has been 2,095,700 shares per day over the past 30 days. Medical Properties has a market cap of $2.7 billion and is part of the real estate industry. Shares are down 4.7% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Medical Properties

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels 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:

  • The revenue growth greatly exceeded the industry average of 7.2%. Since the same quarter one year prior, revenues rose by 40.4%. 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 MEDICAL PROPERTIES TRUST is currently very high, coming in at 81.10%. Regardless of MPW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 20.04% trails the industry average.
  • The share price of MEDICAL PROPERTIES TRUST has not done very well: it is down 24.75% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • 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 the Real Estate Investment Trusts (REITs) industry average. The net income has decreased by 19.2% when compared to the same quarter one year ago, dropping from $28.54 million to $23.06 million.

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