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 or Stephanie Link.

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."

Stag Industrial

Dividend Yield: 5.30%

Stag Industrial

(NYSE:

STAG

) shares currently have a dividend yield of 5.30%.

STAG Industrial, Inc. is a real estate investment trust. The firm invests in the real estate markets of United States. It is engaged in investment and management of real estate assets. STAG Industrial, Inc. was founded on July 21, 2010 and is based in Boston, Massachusetts.

The average volume for Stag Industrial has been 486,000 shares per day over the past 30 days. Stag Industrial has a market cap of $1.6 billion and is part of the real estate industry. Shares are up 5.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Stag Industrial

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins.

Highlights from the ratings report include:

  • STAG's revenue growth has slightly outpaced the industry average of 13.7%. Since the same quarter one year prior, revenues rose by 22.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • STAG INDUSTRIAL INC has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, STAG INDUSTRIAL INC continued to lose money by earning -$0.21 versus -$0.45 in the prior year. For the next year, the market is expecting a contraction of 4.8% in earnings (-$0.22 versus -$0.21).
  • The gross profit margin for STAG INDUSTRIAL INC is currently extremely low, coming in at 10.88%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.80% significantly trails the industry average.
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 45.9% when compared to the same quarter one year ago, falling from $0.63 million to $0.34 million.

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Cenovus Energy

Dividend Yield: 4.80%

Cenovus Energy

(NYSE:

CVE

) shares currently have a dividend yield of 4.80%.

Cenovus Energy Inc., an integrated oil company, together with its subsidiaries, develops, produces, and markets crude oil, natural gas, and natural gas liquids (NGLs) in Canada with refining operations in Illinois and Texas, the United States. The company has a P/E ratio of 14.25.

The average volume for Cenovus Energy has been 2,512,000 shares per day over the past 30 days. Cenovus Energy has a market cap of $14.7 billion and is part of the energy industry. Shares are down 3.7% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Cenovus Energy

as a

hold

. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, 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 unimpressive growth in net income, poor profit margins and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • Net operating cash flow has increased to $1,092.00 million or 30.00% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.92%.
  • The current debt-to-equity ratio, 0.50, 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 0.90 is somewhat weak and could be cause for future problems.
  • The gross profit margin for CENOVUS ENERGY INC is rather low; currently it is at 23.24%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 7.12% is above that of 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 the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 4.3% when compared to the same quarter one year ago, dropping from $370.00 million to $354.00 million.

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Lexington Realty

Dividend Yield: 6.10%

Lexington Realty

(NYSE:

LXP

) shares currently have a dividend yield of 6.10%.

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 102.09.

The average volume for Lexington Realty has been 1,676,800 shares per day over the past 30 days. Lexington Realty has a market cap of $2.6 billion and is part of the real estate industry. Shares are up 2.3% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates

Lexington Realty

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in stock price during the past year and expanding profit margins. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:

  • LXP's revenue growth has slightly outpaced the industry average of 13.7%. Since the same quarter one year prior, revenues rose by 18.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • Net operating cash flow has slightly increased to $61.83 million or 3.17% when compared to the same quarter last year. Despite an increase in cash flow, LEXINGTON REALTY TRUST's average is still marginally south of the industry average growth rate of 6.60%.
  • LEXINGTON REALTY TRUST reported significant earnings per share improvement 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, LEXINGTON REALTY TRUST swung to a loss, reporting -$0.16 versus $0.90 in the prior year. This year, the market expects an improvement in earnings ($0.31 versus -$0.16).
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, LEXINGTON REALTY TRUST's return on equity significantly trails that of both the industry average and the S&P 500.

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