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."

Plains All American Pipeline

Dividend Yield: 4.70%

Plains All American Pipeline (NYSE: PAA) shares currently have a dividend yield of 4.70%.

Plains All American Pipeline, L.P., together with its subsidiaries, is engaged in transporting, storing, terminalling, and marketing crude oil, natural gas liquids (NGL), natural gas, and refined products in the United States and Canada. The company has a P/E ratio of 26.22.

The average volume for Plains All American Pipeline has been 1,035,700 shares per day over the past 30 days. Plains All American Pipeline has a market cap of $20.8 billion and is part of the energy industry. Shares are up 8.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Plains All American Pipeline as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.7%. Since the same quarter one year prior, revenues slightly increased by 8.7%. 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.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
  • PLAINS ALL AMER PIPELNE -LP's earnings per share declined by 21.1% 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, PLAINS ALL AMER PIPELNE -LP increased its bottom line by earning $2.80 versus $2.40 in the prior year. For the next year, the market is expecting a contraction of 12.9% in earnings ($2.44 versus $2.80).
  • 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, PLAINS ALL AMER PIPELNE -LP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The gross profit margin for PLAINS ALL AMER PIPELNE -LP is currently extremely low, coming in at 4.95%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.56% trails that of the industry average.

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HCP

Dividend Yield: 5.00%

HCP (NYSE: HCP) shares currently have a dividend yield of 5.00%.

HCP, Inc. is an independent hybrid real estate investment trust. The fund invests in real estate markets of the United States. The company has a P/E ratio of 21.77.

The average volume for HCP has been 2,357,600 shares per day over the past 30 days. HCP has a market cap of $19.9 billion and is part of the real estate industry. Shares are up 19.4% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates HCP as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, expanding profit margins, good cash flow from operations and increase in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.2%. 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.
  • HCP INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HCP INC increased its bottom line by earning $1.98 versus $1.80 in the prior year. This year, the market expects an improvement in earnings ($2.03 versus $1.98).
  • The gross profit margin for HCP INC is rather high; currently it is at 59.87%. Regardless of HCP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HCP's net profit margin of 39.73% significantly outperformed against the industry.
  • Net operating cash flow has remained constant at $360.52 million with no significant change when compared to the same quarter last year. Along with maintaining stable cash flow from operations, the firm exceeded the industry average cash flow growth rate of -24.40%.
  • The net income growth from the same quarter one year ago has 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 2.6% when compared to the same quarter one year prior, going from $213.40 million to $218.89 million.

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EnLink Midstream Partners

Dividend Yield: 4.80%

EnLink Midstream Partners (NYSE: ENLK) shares currently have a dividend yield of 4.80%.

EnLink Midstream Partners, LP, through its subsidiary, EnLink Midstream Operating, LP, provides midstream energy services. It engages 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 469,800 shares per day over the past 30 days. EnLink Midstream Partners has a market cap of $7.2 billion and is part of the energy industry. Shares are up 11% year-to-date as of the close of trading on Tuesday.

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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, increase in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • ENLK's very impressive revenue growth greatly exceeded the industry average of 2.7%. Since the same quarter one year prior, revenues leaped by 57.1%. 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 net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 26.2% when compared to the same quarter one year prior, rising from $32.80 million to $41.40 million.
  • Net operating cash flow has significantly increased by 107.01% to $108.60 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 -6.28%.
  • The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.92 is somewhat weak and could be cause for future problems.
  • 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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

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