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

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."

Medallion Financial

Dividend Yield: 9.30%

Medallion Financial

(NASDAQ:

TAXI

) shares currently have a dividend yield of 9.30%.

Medallion Financial Corp., through its subsidiaries, operates as a specialty finance company in the United States. The company engages in originating, acquiring, and servicing loans that finance taxicab medallions and various types of commercial businesses. The company has a P/E ratio of 9.32.

The average volume for Medallion Financial has been 190,800 shares per day over the past 30 days. Medallion Financial has a market cap of $256.1 million and is part of the financial services industry. Shares are up 3.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Medallion Financial

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 9.3%. Since the same quarter one year prior, revenues slightly increased by 6.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income increased by 22.1% when compared to the same quarter one year prior, going from $6.66 million to $8.13 million.
  • MEDALLION FINANCIAL CORP has improved earnings per share by 10.3% 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, MEDALLION FINANCIAL CORP reported lower earnings of $1.14 versus $1.16 in the prior year. This year, the market expects an improvement in earnings ($1.18 versus $1.14).
  • 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. When compared to other companies in the Capital Markets industry and the overall market, MEDALLION FINANCIAL CORP's return on equity is below that of both the industry average and the S&P 500.
  • TAXI'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 28.04%, 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.

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THL Credit

Dividend Yield: 11.10%

THL Credit

(NASDAQ:

TCRD

) shares currently have a dividend yield of 11.10%.

THL Credit, Inc. is a business development company specializing in direct and fund of fund investments. The fund seeks to invest in debt and equity securities of middle market companies. The company has a P/E ratio of 9.72.

The average volume for THL Credit has been 215,600 shares per day over the past 30 days. THL Credit has a market cap of $415.3 million and is part of the financial services industry. Shares are up 4.2% year-to-date as of the close of trading on Thursday.

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TheStreet Recommends

TheStreet Ratings rates

THL Credit

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 9.3%. Since the same quarter one year prior, revenues rose by 21.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 52.2% when compared to the same quarter one year prior, rising from $7.76 million to $11.81 million.
  • The gross profit margin for THL CREDIT INC is rather high; currently it is at 65.14%. Regardless of TCRD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TCRD's net profit margin of 51.02% significantly outperformed against the industry.
  • 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. When compared to other companies in the Capital Markets industry and the overall market, THL CREDIT INC's return on equity is below that of both the industry average and the S&P 500.
  • TCRD has underperformed the S&P 500 Index, declining 11.89% from its price level of one year ago. 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.

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Mid-Con Energy Partners

Dividend Yield: 8.90%

Mid-Con Energy Partners

(NASDAQ:

MCEP

) shares currently have a dividend yield of 8.90%.

Mid-Con Energy Partners, LP acquires, explores, develops, and produces oil and natural gas properties in North America. The company has a P/E ratio of 5.74.

The average volume for Mid-Con Energy Partners has been 275,800 shares per day over the past 30 days. Mid-Con Energy Partners has a market cap of $167.0 million and is part of the energy industry. Shares are down 10.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Mid-Con Energy Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. 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:

  • MCEP's very impressive revenue growth greatly exceeded the industry average of 19.8%. Since the same quarter one year prior, revenues leaped by 134.2%. 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 debt-to-equity ratio is somewhat low, currently at 0.88, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, MCEP has a quick ratio of 1.92, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for MID-CON ENERGY PARTNERS -LP is rather low; currently it is at 23.49%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 0.15% trails that of the industry average.
  • Net operating cash flow has decreased to $10.88 million or 23.07% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, MID-CON ENERGY PARTNERS -LP has marginally lower results.

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