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."

Resource Capital

Dividend Yield: 15.50%

Resource Capital (NYSE: RSO) shares currently have a dividend yield of 15.50%.

Resource Capital Corp., a diversified real estate investment trust, primarily focuses on originating, holding, and managing commercial mortgage loans and other commercial real estate-related debt and equity investments in the United States. The company has a P/E ratio of 12.88.

The average volume for Resource Capital has been 1,006,100 shares per day over the past 30 days. Resource Capital has a market cap of $678.3 million and is part of the real estate industry. Shares are down 13.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Resource Capital as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 12.2%. Since the same quarter one year prior, revenues rose by 37.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • RESOURCE CAPITAL CORP 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, RESOURCE CAPITAL CORP reported lower earnings of $0.33 versus $0.72 in the prior year. This year, the market expects an improvement in earnings ($0.42 versus $0.33).
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, RESOURCE CAPITAL CORP's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$5.28 million or 122.52% 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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Ferrellgas Partners

Dividend Yield: 7.50%

Ferrellgas Partners (NYSE: FGP) shares currently have a dividend yield of 7.50%.

Ferrellgas Partners, L.P. distributes and sells propane and related equipment and supplies primarily in the United States. The company transports propane to propane distribution locations, tanks on customers' premises, or to portable propane tanks delivered to retailers. The company has a P/E ratio of 64.95.

The average volume for Ferrellgas Partners has been 172,100 shares per day over the past 30 days. Ferrellgas Partners has a market cap of $2.2 billion and is part of the energy industry. Shares are up 16% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Ferrellgas Partners as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • FGP's revenue growth has slightly outpaced the industry average of 8.9%. Since the same quarter one year prior, revenues rose by 13.8%. 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.
  • 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. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • FERRELLGAS PARTNERS -LP 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, FERRELLGAS PARTNERS -LP reported lower earnings of $0.40 versus $0.68 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $0.40).
  • The gross profit margin for FERRELLGAS PARTNERS -LP is currently extremely low, coming in at 10.23%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -11.97% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $21.79 million or 40.90% 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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Rait Financial

Dividend Yield: 9.90%

Rait Financial (NYSE: RAS) shares currently have a dividend yield of 9.90%.

RAIT Financial Trust operates as a self-managed and self-advised real estate investment trust (REIT). The company, through its subsidiaries, invests in, manages, and services real estate-related assets with a focus on commercial real estate.

The average volume for Rait Financial has been 591,500 shares per day over the past 30 days. Rait Financial has a market cap of $597.4 million and is part of the real estate industry. Shares are down 19.3% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Rait Financial as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 12.2%. Since the same quarter one year prior, revenues rose by 22.4%. 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 Real Estate Investment Trusts (REITs) industry. The net income increased by 69.8% when compared to the same quarter one year prior, rising from -$60.29 million to -$18.24 million.
  • RAIT FINANCIAL TRUST 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, RAIT FINANCIAL TRUST reported poor results of -$4.58 versus -$3.92 in the prior year. This year, the market expects an improvement in earnings (-$0.43 versus -$4.58).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, RAIT FINANCIAL TRUST's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for RAIT FINANCIAL TRUST is currently lower than what is desirable, coming in at 33.27%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -22.57% is significantly below that of the industry average.

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