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."

Whitestone REIT

Dividend Yield: 7.10%

Whitestone REIT

(NYSE:

WSR

) shares currently have a dividend yield of 7.10%.

WhiteStone REIT is a Maryland REIT engaged in owning and operating commercial properties in culturally diverse markets in major metropolitan areas. The company has a P/E ratio of 73.27.

The average volume for Whitestone REIT has been 86,600 shares per day over the past 30 days. Whitestone REIT has a market cap of $368.1 million and is part of the real estate industry. Shares are up 5.2% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Whitestone REIT

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • WSR's revenue growth has slightly outpaced the industry average of 10.1%. Since the same quarter one year prior, revenues rose by 11.7%. 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.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 126.6% when compared to the same quarter one year prior, rising from $1.26 million to $2.86 million.
  • WHITESTONE REIT's earnings per share declined by 50.0% 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, WHITESTONE REIT increased its bottom line by earning $0.24 versus $0.21 in the prior year. This year, the market expects an improvement in earnings ($0.26 versus $0.24).
  • The gross profit margin for WHITESTONE REIT is rather low; currently it is at 20.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 14.86% significantly trails the industry average.
  • Net operating cash flow has decreased to $5.77 million or 36.95% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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Marine Petroleum

Dividend Yield: 11.00%

Marine Petroleum

(NASDAQ:

MARPS

) shares currently have a dividend yield of 11.00%.

Marine Petroleum Trust, through its subsidiary, Marine Petroleum Corporation, operates as a royalty trust in the United States. The company has a P/E ratio of 8.40.

The average volume for Marine Petroleum has been 2,800 shares per day over the past 30 days. Marine Petroleum has a market cap of $22.5 million and is part of the financial services industry. Shares are up 15% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Marine Petroleum

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, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and deteriorating net income.

Highlights from the ratings report include:

  • MARPS 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.
  • The gross profit margin for MARINE PETROLEUM TRUST is currently very high, coming in at 100.00%. MARPS has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, MARPS's net profit margin of 93.19% significantly outperformed against the industry.
  • MARINE PETROLEUM TRUST's earnings per share declined by 31.1% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, MARINE PETROLEUM TRUST increased its bottom line by earning $1.41 versus $1.36 in the prior year.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.30%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 31.11% 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.
  • The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 31.6% when compared to the same quarter one year ago, falling from $0.90 million to $0.62 million.

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Gladstone Capital

Dividend Yield: 9.30%

Gladstone Capital

(NASDAQ:

GLAD

) shares currently have a dividend yield of 9.30%.

Gladstone Capital Corporation is a business development company specializing in investments in debt and equity securities. The company has a P/E ratio of 17.00.

The average volume for Gladstone Capital has been 135,700 shares per day over the past 30 days. Gladstone Capital has a market cap of $189.2 million and is part of the financial services industry. Shares are up 9.1% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Gladstone Capital

as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth 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:

  • The revenue growth came in higher than the industry average of 13.2%. Since the same quarter one year prior, revenues slightly increased by 4.0%. 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 gross profit margin for GLADSTONE CAPITAL CORP is rather high; currently it is at 65.32%. Regardless of GLAD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GLAD's net profit margin of 3.79% is significantly lower than the industry average.
  • GLADSTONE 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 year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, GLADSTONE CAPITAL CORP reported lower earnings of $0.53 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($0.84 versus $0.53).
  • Net operating cash flow has significantly decreased to -$42.32 million or 3426.91% 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 share price of GLADSTONE CAPITAL CORP has not done very well: it is down 8.98% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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