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."

Capital Product Partners

Dividend Yield: 9.70%

Capital Product Partners (NASDAQ: CPLP) shares currently have a dividend yield of 9.70%.

Capital Product Partners L.P., a shipping company, provides marine transportation services in Greece. The company has a P/E ratio of 47.75.

The average volume for Capital Product Partners has been 752,200 shares per day over the past 30 days. Capital Product Partners has a market cap of $849.9 million and is part of the transportation industry. Shares are down 11.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Capital Product Partners as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. 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 rose by 13.6%. 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.
  • CPLP's debt-to-equity ratio of 0.77 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that CPLP's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.91 is high and demonstrates strong liquidity.
  • The gross profit margin for CAPITAL PRODUCT PARTNERS LP is rather high; currently it is at 58.94%. Regardless of CPLP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CPLP's net profit margin of 16.47% compares favorably to the industry average.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CAPITAL PRODUCT PARTNERS LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • CAPITAL PRODUCT 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. 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, CAPITAL PRODUCT PARTNERS LP turned its bottom line around by earning $0.99 versus -$0.45 in the prior year. For the next year, the market is expecting a contraction of 71.2% in earnings ($0.29 versus $0.99).

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BlackRock Kelso Capital Corporation

Dividend Yield: 9.60%

BlackRock Kelso Capital Corporation (NASDAQ: BKCC) shares currently have a dividend yield of 9.60%.

BlackRock Kelso Capital Corporation is Business Development Company specializing in investments in middle market companies. The fund invests in all industries. The company has a P/E ratio of 6.59.

The average volume for BlackRock Kelso Capital Corporation has been 399,800 shares per day over the past 30 days. BlackRock Kelso Capital Corporation has a market cap of $653.9 million and is part of the financial services industry. Shares are down 5.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates BlackRock Kelso Capital Corporation as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, notable return on equity, good cash flow from operations, expanding profit margins and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 156.7% when compared to the same quarter one year prior, rising from $12.02 million to $30.87 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Capital Markets industry and the overall market, BLACKROCK KELSO CAPITAL CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 273.87% to $193.65 million when compared to the same quarter last year. In addition, BLACKROCK KELSO CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of -127.80%.
  • The gross profit margin for BLACKROCK KELSO CAPITAL CORP is rather high; currently it is at 66.84%. Regardless of BKCC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BKCC's net profit margin of 91.42% significantly outperformed against the industry.
  • BLACKROCK KELSO CAPITAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, BLACKROCK KELSO CAPITAL CORP increased its bottom line by earning $1.20 versus $0.78 in the prior year. For the next year, the market is expecting a contraction of 31.9% in earnings ($0.82 versus $1.20).

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THL Credit

Dividend Yield: 10.60%

THL Credit (NASDAQ: TCRD) shares currently have a dividend yield of 10.60%.

THL Credit, Inc. is a business development company specializing in direct and fund of fund investments. The fund seeks to invest in debt and equity securities of middle market companies. The company has a P/E ratio of 11.68.

The average volume for THL Credit has been 177,700 shares per day over the past 30 days. THL Credit has a market cap of $435.7 million and is part of the financial services industry. Shares are down 22.9% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates THL Credit as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.9%. Since the same quarter one year prior, revenues slightly increased by 4.7%. 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.
  • Net operating cash flow has significantly increased by 130.02% to $13.16 million when compared to the same quarter last year. In addition, THL CREDIT INC has also vastly surpassed the industry average cash flow growth rate of -127.80%.
  • The gross profit margin for THL CREDIT INC is rather high; currently it is at 67.49%. Regardless of TCRD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TCRD's net profit margin of 39.09% significantly outperformed against the industry.
  • THL CREDIT 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, THL CREDIT INC increased its bottom line by earning $1.45 versus $1.26 in the prior year. For the next year, the market is expecting a contraction of 4.1% in earnings ($1.39 versus $1.45).
  • 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 Capital Markets industry and the overall market on the basis of return on equity, THL CREDIT INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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