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: 11.90%

TAL International Group

(NYSE:

TAL

) shares currently have a dividend yield of 11.90%.

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 7.25.

The average volume for TAL International Group has been 333,400 shares per day over the past 30 days. TAL International Group has a market cap of $505.9 million and is part of the diversified services industry. Shares are down 9.7% 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 attractive valuation levels, 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 generally higher debt management risk.

Highlights from the ratings report include:

  • Net operating cash flow has slightly increased to $95.54 million or 4.69% when compared to the same quarter last year. In addition, TAL INTERNATIONAL GROUP INC has also modestly surpassed the industry average cash flow growth rate of -1.79%.
  • The gross profit margin for TAL INTERNATIONAL GROUP INC is currently very high, coming in at 81.79%. Regardless of TAL'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 4.00% trails the industry average.
  • The debt-to-equity ratio is very high at 5.04 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Trading Companies & Distributors industry and the overall market, TAL INTERNATIONAL GROUP INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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Alliance Resource Partners

Dividend Yield: 12.10%

Alliance Resource Partners

(NASDAQ:

ARLP

) shares currently have a dividend yield of 12.10%.

Alliance Resource Partners, L.P. produces and markets coal primarily to utilities and industrial users in the United States. It operates in two segments, Illinois Basin and Appalachia; and Other and Corporate. The company has a P/E ratio of 9.32.

The average volume for Alliance Resource Partners has been 304,000 shares per day over the past 30 days. Alliance Resource Partners has a market cap of $1.1 billion and is part of the metals & mining industry. Shares are up 8.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Alliance Resource Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, 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:

  • 37.05% is the gross profit margin for ALLIANCE RESOURCE PTNRS -LP which we consider to be strong. Regardless of ARLP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ARLP's net profit margin of 11.45% significantly outperformed against the industry.
  • ARLP, with its decline in revenue, slightly underperformed the industry average of 24.6%. Since the same quarter one year prior, revenues fell by 26.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The debt-to-equity ratio of 1.03 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.37, which clearly demonstrates the inability to cover short-term cash needs.
  • Net operating cash flow has significantly decreased to $80.59 million or 50.13% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ALLIANCE RESOURCE PTNRS -LP has marginally lower results.

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Costamare

Dividend Yield: 12.20%

Costamare

(NYSE:

CMRE

) shares currently have a dividend yield of 12.20%.

Costamare Inc. owns and charters containerships to liner companies worldwide. The company has a P/E ratio of 5.67.

The average volume for Costamare has been 218,700 shares per day over the past 30 days. Costamare has a market cap of $717.8 million and is part of the transportation industry. Shares are down 5.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Costamare

as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk 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 significantly exceeded that of the S&P 500 and the Marine industry. The net income increased by 33.1% when compared to the same quarter one year prior, rising from $26.28 million to $35.00 million.
  • 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 Marine industry and the overall market, COSTAMARE INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Despite the weak revenue results, CMRE has outperformed against the industry average of 14.0%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • CMRE'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 51.96%, 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. 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.
  • Currently the debt-to-equity ratio of 1.55 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 0.36, which clearly demonstrates the inability to cover short-term cash needs.

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