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."

TAL International Group

Dividend Yield: 17.80%

TAL International Group

(NYSE:

TAL

) shares currently have a dividend yield of 17.80%.

TAL International Group, Inc., together with its subsidiaries, leases intermodal transportation equipment and provides maritime container management services worldwide. The company operates in two segments, Equipment Leasing and Equipment Trading. The company has a P/E ratio of 4.60.

The average volume for TAL International Group has been 526,500 shares per day over the past 30 days. TAL International Group has a market cap of $537.1 million and is part of the diversified services industry. Shares are down 64.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

TAL International Group

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:

  • TAL's revenue growth has slightly outpaced the industry average of 0.0%. Since the same quarter one year prior, revenues slightly increased by 2.3%. 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.
  • TAL INTERNATIONAL GROUP INC's earnings per share declined by 6.9% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, TAL INTERNATIONAL GROUP INC reported lower earnings of $3.69 versus $4.25 in the prior year. For the next year, the market is expecting a contraction of 15.7% in earnings ($3.11 versus $3.69).
  • The debt-to-equity ratio is very high at 4.77 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.

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Alon USA Partners

Dividend Yield: 17.50%

Alon USA Partners

(NYSE:

ALDW

) shares currently have a dividend yield of 17.50%.

Alon USA Partners, LP refines and markets petroleum products primarily in the South Central and Southwestern regions of the United States. The company owns and operates a crude oil refinery in Big Spring, Texas with crude oil throughput capacity of 73,000 barrels per day. The company has a P/E ratio of 6.92.

The average volume for Alon USA Partners has been 234,500 shares per day over the past 30 days. Alon USA Partners has a market cap of $1.5 billion and is part of the energy industry. Shares are up 83.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Alon USA Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 691.66% and other important driving factors, this stock has surged by 31.41% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • ALON USA PARTNERS LP reported significant earnings per share improvement 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ALON USA PARTNERS LP increased its bottom line by earning $2.70 versus $2.19 in the prior year. This year, the market expects an improvement in earnings ($2.74 versus $2.70).
  • Despite the weak revenue results, ALDW has outperformed against the industry average of 34.1%. Since the same quarter one year prior, revenues fell by 13.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for ALON USA PARTNERS LP is currently extremely low, coming in at 14.98%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, ALDW's net profit margin of 9.50% compares favorably to the industry average.
  • The debt-to-equity ratio of 1.43 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, ALDW maintains a poor quick ratio of 0.83, which illustrates the inability to avoid short-term cash problems.

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Wi-Lan

Dividend Yield: 8.40%

Wi-Lan

(NASDAQ:

WILN

) shares currently have a dividend yield of 8.40%.

Wi-LAN Inc., an intellectual property licensing company, develops, acquires, and licenses various patented technologies, which are used in products in the communications and consumer electronics markets. The company has a P/E ratio of 37.60.

The average volume for Wi-Lan has been 50,300 shares per day over the past 30 days. Wi-Lan has a market cap of $227.0 million and is part of the telecommunications industry. Shares are down 38.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Wi-Lan

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 growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 10.4%. Since the same quarter one year prior, revenues rose by 36.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • WILN's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, WILN has a quick ratio of 2.20, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has decreased to $7.19 million or 38.91% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • WILN'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 40.13%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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, WILN is still more expensive than most of the other companies in its industry.

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