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."

World Point Terminals

Dividend Yield: 8.50%

World Point Terminals

(NYSE:

WPT

) shares currently have a dividend yield of 8.50%.

World Point Terminals, LP owns, operates, develops, and acquires terminals and other assets for the storage of light refined products, heavy refined products, and crude oil in the East Coast, Gulf Coast, and Midwest regions of the United States. The company has a P/E ratio of 15.59.

The average volume for World Point Terminals has been 27,200 shares per day over the past 30 days. World Point Terminals has a market cap of $490.5 million and is part of the energy industry. Shares are up 4.5% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

World Point Terminals

as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, 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 and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • WPT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.57, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has increased to $18.57 million or 14.91% when compared to the same quarter last year. In addition, WORLD POINT TERMINALS has also vastly surpassed the industry average cash flow growth rate of -39.36%.
  • Despite the weak revenue results, WPT has significantly outperformed against the industry average of 34.7%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • WORLD POINT TERMINALS's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WORLD POINT TERMINALS increased its bottom line by earning $0.98 versus $0.76 in the prior year. For the next year, the market is expecting a contraction of 6.1% in earnings ($0.92 versus $0.98).
  • Looking at the price performance of WPT's shares over the past 12 months, there is not much good news to report: the stock is down 30.37%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.

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Delek Logistics Partners

Dividend Yield: 8.10%

Delek Logistics Partners

(NYSE:

DKL

) shares currently have a dividend yield of 8.10%.

Delek Logistics Partners, LP owns and operates logistics and marketing assets for crude oil, and intermediate and refined products in the United States. It operates in two segments, Pipelines and Transportation, and Wholesale Marketing and Terminalling. The company has a P/E ratio of 11.90.

The average volume for Delek Logistics Partners has been 67,400 shares per day over the past 30 days. Delek Logistics Partners has a market cap of $705.7 million and is part of the energy industry. Shares are down 14.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Delek Logistics Partners

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 weak operating cash flow, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • DKL, with its decline in revenue, slightly underperformed the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 37.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for DELEK LOGISTICS PARTNERS LP is rather low; currently it is at 24.09%. Regardless of DKL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, DKL's net profit margin of 14.04% significantly outperformed against the industry.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 24.2% when compared to the same quarter one year ago, dropping from $20.18 million to $15.30 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 31.52%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 32.09% compared to the year-earlier 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.
  • Net operating cash flow has significantly decreased to $1.26 million or 93.98% 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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Arbor Realty

Dividend Yield: 9.10%

Arbor Realty

(NYSE:

ABR

) shares currently have a dividend yield of 9.10%.

Arbor Realty Trust, Inc., a specialized real estate finance company, invests in various structured finance investments. The company has a P/E ratio of 7.41.

The average volume for Arbor Realty has been 117,600 shares per day over the past 30 days. Arbor Realty has a market cap of $336.9 million and is part of the real estate industry. Shares are down 5.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Arbor Realty

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

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.9%. Since the same quarter one year prior, revenues slightly increased by 2.8%. 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 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 73.6% when compared to the same quarter one year ago, falling from $65.29 million to $17.23 million.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ARBOR REALTY TRUST INC's return on equity is below that of both the industry average and the S&P 500.

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