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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."

Solar Senior Capital

Dividend Yield: 10.60%

Solar Senior Capital

(NASDAQ:

SUNS

) shares currently have a dividend yield of 10.60%.

Solar Senior Capital Ltd. is a business development company specializing in investments in leveraged, middle-market companies in the United States. The fund invests in the form of senior secured loans, including first lien, unitranche, and second lien debt instruments. The company has a P/E ratio of 13.21.

The average volume for Solar Senior Capital has been 25,100 shares per day over the past 30 days. Solar Senior Capital has a market cap of $153.9 million and is part of the financial services industry. Shares are down 11.5% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Solar Senior Capital

TheStreet Recommends

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 4.0%. Since the same quarter one year prior, revenues rose by 22.5%. 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.
  • The gross profit margin for SOLAR SENIOR CAPITAL LTD is currently very high, coming in at 76.38%. Regardless of SUNS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SUNS's net profit margin of -22.92% significantly underperformed when compared to the industry average.
  • SOLAR SENIOR CAPITAL LTD 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, SOLAR SENIOR CAPITAL LTD reported lower earnings of $1.02 versus $1.11 in the prior year. This year, the market expects an improvement in earnings ($1.33 versus $1.02).
  • Net operating cash flow has significantly decreased to -$3.14 million or 103.99% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, SOLAR SENIOR CAPITAL LTD has marginally lower results.
  • The share price of SOLAR SENIOR CAPITAL LTD has not done very well: it is down 12.13% 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. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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Consolidated Communications

Dividend Yield: 7.70%

Consolidated Communications

(NASDAQ:

CNSL

) shares currently have a dividend yield of 7.70%.

Consolidated Communications Holdings, Inc., through its subsidiaries, provides various integrated communications services to residential and business clients.

The average volume for Consolidated Communications has been 193,600 shares per day over the past 30 days. Consolidated Communications has a market cap of $1.0 billion and is part of the telecommunications industry. Shares are down 5.8% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Consolidated Communications

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 14.2%. Since the same quarter one year prior, revenues rose by 30.1%. 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.
  • Net operating cash flow has significantly increased by 55.05% to $71.82 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 41.86%.
  • The gross profit margin for CONSOLIDATED COMM HLDGS INC is rather high; currently it is at 57.10%. Regardless of CNSL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CNSL's net profit margin of 1.33% is significantly lower than the industry average.
  • The debt-to-equity ratio is very high at 5.34 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, CNSL maintains a poor quick ratio of 0.80, which illustrates the inability to avoid short-term cash problems.
  • 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 Diversified Telecommunication Services industry and the overall market, CONSOLIDATED COMM HLDGS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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Hercules Technology Growth Capital

Dividend Yield: 11.50%

Hercules Technology Growth Capital

(NYSE:

HTGC

) shares currently have a dividend yield of 11.50%.

Hercules Technology Growth Capital, Inc. The company has a P/E ratio of 9.13.

The average volume for Hercules Technology Growth Capital has been 377,500 shares per day over the past 30 days. Hercules Technology Growth Capital has a market cap of $776.2 million and is part of the real estate industry. Shares are down 11.5% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Hercules Technology Growth Capital

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations 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, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 4.0%. Since the same quarter one year prior, revenues rose by 27.3%. 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 683.09% to $101.86 million when compared to the same quarter last year. In addition, HERCULES TECH GROWTH CAP INC has also vastly surpassed the industry average cash flow growth rate of -94.16%.
  • The gross profit margin for HERCULES TECH GROWTH CAP INC is currently very high, coming in at 78.47%. Regardless of HTGC'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 8.64% trails the industry average.
  • HERCULES TECH GROWTH CAP 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, HERCULES TECH GROWTH CAP INC reported lower earnings of $1.10 versus $1.62 in the prior year. For the next year, the market is expecting a contraction of 6.4% in earnings ($1.03 versus $1.10).
  • 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 73.1% when compared to the same quarter one year ago, falling from $15.18 million to $4.08 million.

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