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."

Suburban Propane Partners

Dividend Yield: 14.40%

Suburban Propane Partners

(NYSE:

SPH

) shares currently have a dividend yield of 14.40%.

Suburban Propane Partners, L.P., through its subsidiaries, engages in the retail marketing and distribution of propane, fuel oil, and refined fuels. The company has a P/E ratio of 17.81.

The average volume for Suburban Propane Partners has been 420,500 shares per day over the past 30 days. Suburban Propane Partners has a market cap of $1.5 billion and is part of the utilities industry. Shares are up 1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Suburban Propane Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and generally higher debt management risk.

Highlights from the ratings report include:

  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Gas Utilities industry and the overall market on the basis of return on equity, SUBURBAN PROPANE PRTNRS -LP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • SPH, with its decline in revenue, underperformed when compared the industry average of 10.5%. Since the same quarter one year prior, revenues fell by 27.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $65.07 million or 19.25% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of SPH's shares over the past 12 months, there is not much good news to report: the stock is down 41.12%, 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. 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, SPH is still more expensive than most of the other companies in its industry.

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TransCanada

Dividend Yield: 4.40%

TransCanada

(NYSE:

TRP

) shares currently have a dividend yield of 4.40%.

TransCanada Corporation operates as an energy infrastructure company in North America. The company operates in three segments: Natural Gas Pipelines, Liquids Pipelines, and Energy. The company has a P/E ratio of 19.33.

The average volume for TransCanada has been 1,337,000 shares per day over the past 30 days. TransCanada has a market cap of $24.4 billion and is part of the energy industry. Shares are up 3.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

TransCanada

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 36.8%. Since the same quarter one year prior, revenues rose by 20.1%. 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.
  • 46.60% is the gross profit margin for TRANSCANADA CORP which we consider to be strong. Regardless of TRP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TRP's net profit margin of 14.43% significantly outperformed against the industry.
  • Net operating cash flow has remained constant at $1,247.00 million with no significant change when compared to the same quarter last year. Along with maintaining stable cash flow from operations, the firm exceeded the industry average cash flow growth rate of -26.87%.
  • 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, TRANSCANADA CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Currently the debt-to-equity ratio of 1.71 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.32, which clearly demonstrates the inability to cover short-term cash needs.

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Enterprise Products Partners

Dividend Yield: 6.50%

Enterprise Products Partners

(NYSE:

EPD

) shares currently have a dividend yield of 6.50%.

Enterprise Products Partners L.P. provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products in the United States and internationally. The company has a P/E ratio of 19.00.

The average volume for Enterprise Products Partners has been 7,911,500 shares per day over the past 30 days. Enterprise Products Partners has a market cap of $48.0 billion and is part of the energy industry. Shares are down 9.4% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Enterprise Products Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 3.8% when compared to the same quarter one year prior, going from $659.80 million to $684.80 million.
  • EPD, with its decline in revenue, slightly underperformed the industry average of 36.8%. Since the same quarter one year prior, revenues fell by 39.6%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • EPD's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 28.48%, which is also worse than the performance of the S&P 500 Index. 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.
  • The debt-to-equity ratio of 1.12 is relatively high when compared with the industry average, suggesting a need for better debt level management.

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