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." Western Gas PartnersDividend Yield: 6.50%Western Gas Partners (NYSE: WES) shares currently have a dividend yield of 6.50%. Western Gas Partners, LP acquires, develops, owns, and operates midstream energy assets in the Rocky Mountains, the Mid-Continent, North-central Pennsylvania, and Texas. The average volume for Western Gas Partners has been 693,400 shares per day over the past 30 days. Western Gas Partners has a market cap of $7.0 billion and is part of the energy industry. Shares are up 0.9% year-to-date as of the close of trading on Thursday. EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE. TheStreet Ratings rates Western Gas Partners 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 deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself. Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 34.2%. Since the same quarter one year prior, revenues slightly increased by 2.6%. 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 increased to $171.20 million or 30.64% when compared to the same quarter last year. In addition, WESTERN GAS PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -38.88%.
  • 46.92% is the gross profit margin for WESTERN GAS PARTNERS LP which we consider to be strong. 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 -46.23% is in-line with the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 29.85%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 480.95% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 281.7% when compared to the same quarter one year ago, falling from $94.46 million to -$171.66 million.

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Stag Industrial

Dividend Yield: 6.80%

Stag Industrial

(NYSE:

STAG

) shares currently have a dividend yield of 6.80%. STAG Industrial, Inc. is a real estate investment trust. The firm invests in the real estate markets of United States. It is engaged in investment and management of real estate assets. STAG Industrial, Inc. was founded on July 21, 2010 and is based in Boston, Massachusetts. The average volume for Stag Industrial has been 602,500 shares per day over the past 30 days. Stag Industrial has a market cap of $1.4 billion and is part of the real estate industry. Shares are up 9.9% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Stag Industrial

as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself. Highlights from the ratings report include:

  • STAG's revenue growth has slightly outpaced the industry average of 8.1%. Since the same quarter one year prior, revenues rose by 17.7%. 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 slightly increased to $31.65 million or 4.52% when compared to the same quarter last year. In addition, STAG INDUSTRIAL INC has also modestly surpassed the industry average cash flow growth rate of 2.08%.
  • STAG INDUSTRIAL 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. 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, STAG INDUSTRIAL INC reported poor results of -$0.61 versus -$0.27 in the prior year. This year, the market expects an improvement in earnings (-$0.24 versus -$0.61).
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 677.9% when compared to the same quarter one year ago, falling from -$2.45 million to -$19.02 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, STAG INDUSTRIAL INC's return on equity significantly trails that of both the industry average and the S&P 500.

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Ares Capital

Dividend Yield: 9.90%

Ares Capital

(NASDAQ:

ARCC

) shares currently have a dividend yield of 9.90%. Ares Capital Corporation is a business development company specializing in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle market companies. It also makes growth capital and general refinancing. The company has a P/E ratio of 9.32. The average volume for Ares Capital has been 1,660,700 shares per day over the past 30 days. Ares Capital has a market cap of $4.8 billion and is part of the financial services industry. Shares are up 6.7% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Ares Capital

as a

hold

. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity. Highlights from the ratings report include:

  • The gross profit margin for ARES CAPITAL CORP is currently very high, coming in at 81.47%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.62% trails the industry average.
  • Despite the weak revenue results, ARCC has outperformed against the industry average of 22.6%. Since the same quarter one year prior, revenues slightly dropped by 3.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ARES CAPITAL 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. 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, ARES CAPITAL CORP reported lower earnings of $1.20 versus $1.93 in the prior year. This year, the market expects an improvement in earnings ($1.58 versus $1.20).
  • Net operating cash flow has significantly decreased to -$349.76 million or 1034.80% 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 90.4% when compared to the same quarter one year ago, falling from $153.39 million to $14.71 million.

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