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 "Hold."

Ensco

Dividend Yield: 5.90%

Ensco (NYSE: ESV) shares currently have a dividend yield of 5.90%.

Ensco plc provides offshore contract drilling services to the oil and gas industry worldwide. The company operates through three segments: Floaters, Jackups, and Other. The company has a P/E ratio of 26.18.

The average volume for Ensco has been 2,673,800 shares per day over the past 30 days. Ensco has a market cap of $11.8 billion and is part of the energy industry. Shares are down 11.6% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Ensco as a hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. 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 gross profit margin for ENSCO PLC is rather high; currently it is at 52.12%. 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 -97.48% is in-line with the industry average.
  • Net operating cash flow has increased to $504.80 million or 14.18% when compared to the same quarter last year. Despite an increase in cash flow, ENSCO PLC's average is still marginally south of the industry average growth rate of 22.16%.
  • ESV, with its decline in revenue, underperformed when compared the industry average of 21.4%. Since the same quarter one year prior, revenues slightly dropped by 3.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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. Compared to other companies in the Energy Equipment & Services industry and the overall market, ENSCO PLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of ENSCO PLC has not done very well: it is down 11.67% 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.

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

BGC Partners

Dividend Yield: 6.20%

BGC Partners (NASDAQ: BGCP) shares currently have a dividend yield of 6.20%.

BGC Partners, Inc. operates as a brokerage company, primarily servicing the wholesale financial and commercial real estate markets. It operates through two segments, Financial Services and Real Estate Services. The company has a P/E ratio of 35.27.

The average volume for BGC Partners has been 1,225,000 shares per day over the past 30 days. BGC Partners has a market cap of $1.4 billion and is part of the financial services industry. Shares are up 28.3% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates BGC Partners as a hold. Among the primary strengths of the company is its solid stock price performance. At the same time, however, we also find weaknesses including deteriorating net income, poor profit margins and disappointing return on equity.

Highlights from the ratings report include:
  • BGC PARTNERS 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. 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, BGC PARTNERS INC increased its bottom line by earning $0.35 versus $0.16 in the prior year. This year, the market expects an improvement in earnings ($0.57 versus $0.35).
  • BGCP, with its decline in revenue, slightly underperformed the industry average of 2.9%. Since the same quarter one year prior, revenues slightly dropped by 9.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The gross profit margin for BGC PARTNERS INC is currently extremely low, coming in at 10.38%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, BGCP's net profit margin of 1.78% is significantly lower than the industry average.
  • 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 77.9% when compared to the same quarter one year ago, falling from $34.47 million to $7.60 million.

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

China Petroleum & Chemical

Dividend Yield: 4.40%

China Petroleum & Chemical (NYSE: SNP) shares currently have a dividend yield of 4.40%.

China Petroleum & Chemical Corporation, an energy and chemical company, through its subsidiaries, is engaged in the oil and gas, and chemical operations in the People's Republic of China. The company has a P/E ratio of 19.96.

The average volume for China Petroleum & Chemical has been 128,300 shares per day over the past 30 days. China Petroleum & Chemical has a market cap of $114.2 billion and is part of the energy industry. Shares are up 19.3% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates China Petroleum & Chemical as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, deteriorating net income and poor profit margins.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, SNP's share price has jumped by 31.43%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.22 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 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 decreased by 15.4% when compared to the same quarter one year ago, dropping from $2,685.16 million to $2,271.57 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CHINA PETROLEUM & CHEM CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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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