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 or Stephanie Link.

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 "Buy."

Southern

Dividend Yield: 4.70%

Southern (NYSE: SO) shares currently have a dividend yield of 4.70%.

The Southern Company, together with its subsidiaries, operates as a public electric utility company. The company has a P/E ratio of 20.59.

The average volume for Southern has been 4,731,900 shares per day over the past 30 days. Southern has a market cap of $39.8 billion and is part of the utilities industry. Shares are up 9% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Southern as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • SO's revenue growth has slightly outpaced the industry average of 10.4%. Since the same quarter one year prior, revenues rose by 19.2%. 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 Electric Utilities industry. The net income increased by 279.4% when compared to the same quarter one year prior, rising from $97.00 million to $368.00 million.
  • Net operating cash flow has increased to $1,103.00 million or 49.66% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 18.22%.
  • SOUTHERN CO reported significant earnings per share improvement 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, SOUTHERN CO reported lower earnings of $1.87 versus $2.67 in the prior year. This year, the market expects an improvement in earnings ($2.77 versus $1.87).
  • In its most recent trading session, SO has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

EnLink Midstream Partners

Dividend Yield: 4.70%

EnLink Midstream Partners (NYSE: ENLK) shares currently have a dividend yield of 4.70%.

EnLink Midstream Partners, LP, through its subsidiary, EnLink Midstream Operating, LP, provides midstream energy services. It is engaged in the gathering, transmission, processing, fractionation, and marketing natural gas, natural gas liquids (NGLs), crude oil, and condensate.

The average volume for EnLink Midstream Partners has been 476,400 shares per day over the past 30 days. EnLink Midstream Partners has a market cap of $3.4 billion and is part of the energy industry. Shares are up 11.6% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates EnLink Midstream Partners as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, increase in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 37.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • This stock has managed to rise its share value by 53.94% over the past twelve months. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ENLK should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 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 Oil, Gas & Consumable Fuels industry average. The net income increased by 50.0% when compared to the same quarter one year prior, rising from $29.40 million to $44.10 million.
  • Net operating cash flow has significantly increased by 1174.06% to $121.10 million when compared to the same quarter last year. In addition, ENLINK MIDSTREAM PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of 17.51%.
  • ENLINK MIDSTREAM PARTNERS LP has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. 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, ENLINK MIDSTREAM PARTNERS LP reported poor results of -$1.56 versus -$1.01 in the prior year. This year, the market expects an improvement in earnings ($0.32 versus -$1.56).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Geo Group

Dividend Yield: 6.50%

Geo Group (NYSE: GEO) shares currently have a dividend yield of 6.50%.

The GEO Group, Inc. provides government-outsourced services specializing in the management of correctional, detention, and re-entry facilities, and the provision of community based services and youth services in the United States, Australia, South Africa, the United Kingdom, and Canada. The company has a P/E ratio of 20.74.

The average volume for Geo Group has been 619,500 shares per day over the past 30 days. Geo Group has a market cap of $2.6 billion and is part of the real estate industry. Shares are up 9.2% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Geo Group as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, reasonable valuation levels, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Real Estate Investment Trusts (REITs) industry average, but is less than that of the S&P 500. The net income increased by 19.5% when compared to the same quarter one year prior, going from $23.42 million to $27.99 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.3%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $63.15 million or 38.98% when compared to the same quarter last year. In addition, GEO GROUP INC has also modestly surpassed the industry average cash flow growth rate of 30.28%.
  • GEO GROUP INC has improved earnings per share by 18.2% 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, GEO GROUP INC reported lower earnings of $1.64 versus $2.37 in the prior year. This year, the market expects an improvement in earnings ($1.81 versus $1.64).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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