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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: 10.80%

Solar Senior Capital

(NASDAQ:

SUNS

) shares currently have a dividend yield of 10.80%.

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 12.91.

The average volume for Solar Senior Capital has been 26,400 shares per day over the past 30 days. Solar Senior Capital has a market cap of $150.4 million and is part of the financial services industry. Shares are down 12.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Solar Senior Capital

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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 4.2%. 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 is down 14.97% when compared to where it was trading one year earlier. This reflects both (a) the trend in the overall market as well as (b) the sharp decline in the company's earnings per share. 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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TPG Specialty Lending

Dividend Yield: 10.20%

TPG Specialty Lending

(NYSE:

TSLX

) shares currently have a dividend yield of 10.20%.

TPG Specialty Lending, Inc. is a business development company. The company has a P/E ratio of 8.63.

The average volume for TPG Specialty Lending has been 144,800 shares per day over the past 30 days. TPG Specialty Lending has a market cap of $827.6 million and is part of the real estate industry. Shares are down 2.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

TPG Specialty Lending

as a

hold

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

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 4.2%. Since the same quarter one year prior, revenues rose by 21.8%. 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.
  • Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, TPG SPECIALTY LENDING INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • TPG SPECIALTY LENDING 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. This year, the market expects an improvement in earnings ($1.75 versus $1.73).
  • The share price of TPG SPECIALTY LENDING INC is down 12.48% when compared to where it was trading one year earlier. This reflects both (a) the trend in the overall market as well as (b) the sharp decline in the company's earnings per share. 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 significantly underperformed against the S&P 500 and did not exceed that of the Capital Markets industry. The net income has significantly decreased by 49.8% when compared to the same quarter one year ago, falling from $18.60 million to $9.34 million.

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Harvest Capital Credit

Dividend Yield: 13.40%

Harvest Capital Credit

(NASDAQ:

HCAP

) shares currently have a dividend yield of 13.40%.

Harvest Capital Credit LLC is a business development company providing structured credit to small businesses. The company has a P/E ratio of 6.54.

The average volume for Harvest Capital Credit has been 24,900 shares per day over the past 30 days. Harvest Capital Credit has a market cap of $63.1 million and is part of the financial services industry. Shares are down 13.6% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Harvest Capital Credit

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 deteriorating net income, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 4.2%. Since the same quarter one year prior, revenues rose by 26.9%. 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 HARVEST CAPITAL CREDIT CORP is rather high; currently it is at 62.61%. Regardless of HCAP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HCAP's net profit margin of 16.91% compares favorably to the industry average.
  • HARVEST CAPITAL CREDIT 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, HARVEST CAPITAL CREDIT CORP increased its bottom line by earning $1.52 versus $0.47 in the prior year. For the next year, the market is expecting a contraction of 11.8% in earnings ($1.34 versus $1.52).
  • Net operating cash flow has significantly decreased to -$12.42 million or 246.71% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 58.3% when compared to the same quarter one year ago, falling from $2.02 million to $0.84 million.

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