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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."

USA Compression Partners

Dividend Yield: 10.90%

USA Compression Partners

(NYSE:

USAC

) shares currently have a dividend yield of 10.90%.

USA Compression Partners, LP provides natural gas compression services under term contracts with customers in the oil and gas industry in the United States. It engineers, designs, operates, services, and repairs its compression units and maintains related support inventory and equipment. The company has a P/E ratio of 25.55.

The average volume for USA Compression Partners has been 65,900 shares per day over the past 30 days. USA Compression Partners has a market cap of $607.5 million and is part of the energy industry. Shares are up 16.3% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

TheStreet Recommends

USA Compression Partners

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, 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 a generally disappointing performance in the stock itself and generally higher debt management risk.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 0.9%. Since the same quarter one year prior, revenues rose by 29.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • USA COMPRESSION PRTNRS 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, USA COMPRESSION PRTNRS LP increased its bottom line by earning $0.58 versus $0.32 in the prior year. This year, the market expects an improvement in earnings ($0.60 versus $0.58).
  • USAC's debt-to-equity ratio of 0.84 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.47 is very low and demonstrates very weak liquidity.
  • USAC'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 25.91%, 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, USAC is still more expensive than most of the other companies in its industry.

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Och-Ziff Capital Management Group

Dividend Yield: 7.30%

Och-Ziff Capital Management Group

(NYSE:

OZM

) shares currently have a dividend yield of 7.30%.

Och-Ziff Capital Management Group LLC is a publicly owned hedge fund sponsor. The firm provides investment advisory services for its clients. It invests in equity markets across the world. The firm makes its investments in alternative markets across the world. The company has a P/E ratio of 15.10.

The average volume for Och-Ziff Capital Management Group has been 596,100 shares per day over the past 30 days. Och-Ziff Capital Management Group has a market cap of $2.1 billion and is part of the financial services industry. Shares are up 7.3% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Och-Ziff Capital Management Group

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and increase in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow 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 5.9%. Since the same quarter one year prior, revenues rose by 16.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • 46.68% is the gross profit margin for OCH-ZIFF CAPITAL MGMT LLC which we consider to be strong. Regardless of OZM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OZM's net profit margin of 7.77% is significantly lower than the industry average.
  • OZM has underperformed the S&P 500 Index, declining 8.07% 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.
  • Net operating cash flow has significantly decreased to $149.27 million or 75.37% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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Pennant Park Investment Corporation

Dividend Yield: 13.30%

Pennant Park Investment Corporation

(NASDAQ:

PNNT

) shares currently have a dividend yield of 13.30%.

PennantPark Investment Corporation is a publicly listed business development firm specializing in direct and mezzanine investments in middle market companies. It invests in the form of mezzanine debt, senior secured loans, and equity investments. The company has a P/E ratio of 5.07.

The average volume for Pennant Park Investment Corporation has been 345,500 shares per day over the past 30 days. Pennant Park Investment Corporation has a market cap of $632.3 million and is part of the financial services industry. Shares are down 11.9% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Pennant Park Investment Corporation

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 a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • PNNT's revenue growth has slightly outpaced the industry average of 5.9%. Since the same quarter one year prior, revenues rose by 12.6%. 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 292.92% to $56.30 million when compared to the same quarter last year. In addition, PENNANTPARK INVESTMENT CORP has also vastly surpassed the industry average cash flow growth rate of 187.83%.
  • The gross profit margin for PENNANTPARK INVESTMENT CORP is rather high; currently it is at 67.19%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 17.29% trails the industry average.
  • 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 Capital Markets industry and the overall market, PENNANTPARK INVESTMENT CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 27.67%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 83.60% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

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