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."

Solar Senior Capital

Dividend Yield: 9.20%

Solar Senior Capital (NASDAQ: SUNS) shares currently have a dividend yield of 9.20%.

Solar Senior Capital Ltd. is a business development company specializing in investments in leveraged, middle-market companies in the United States. The fund invests in the form of senior secured loans, including first lien, unitranche, and second lien debt instruments. The company has a P/E ratio of 13.21.

The average volume for Solar Senior Capital has been 62,800 shares per day over the past 30 days. Solar Senior Capital has a market cap of $176.7 million and is part of the financial services industry. Shares are down 15.9% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Solar Senior Capital as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, 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:
  • SUNS's revenue growth has slightly outpaced the industry average of 1.0%. Since the same quarter one year prior, revenues slightly increased by 8.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Capital Markets industry average. The net income increased by 30.6% when compared to the same quarter one year prior, rising from $1.49 million to $1.94 million.
  • Net operating cash flow has significantly increased by 135.72% to $4.69 million when compared to the same quarter last year. In addition, SOLAR SENIOR CAPITAL LTD has also vastly surpassed the industry average cash flow growth rate of -227.20%.
  • The gross profit margin for SOLAR SENIOR CAPITAL LTD is currently very high, coming in at 75.09%. Regardless of SUNS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SUNS's net profit margin of 37.78% significantly outperformed against the industry.
  • SOLAR SENIOR CAPITAL LTD has improved earnings per share by 30.8% 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, SOLAR SENIOR CAPITAL LTD reported lower earnings of $1.11 versus $1.46 in the prior year. This year, the market expects an improvement in earnings ($1.17 versus $1.11).

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PennantPark Floating Rate Capital

Dividend Yield: 7.60%

PennantPark Floating Rate Capital (NASDAQ: PFLT) shares currently have a dividend yield of 7.60%.

PennantPark Floating Rate Capital Ltd. is a business development company. It seeks to make secondary direct, debt, equity, and loan investments. The fund seeks to invest through floating rate loans in private or thinly traded or small market-cap, public middle market companies. The company has a P/E ratio of 8.52.

The average volume for PennantPark Floating Rate Capital has been 70,800 shares per day over the past 30 days. PennantPark Floating Rate Capital has a market cap of $210.8 million and is part of the financial services industry. Shares are up 3.2% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates PennantPark Floating Rate Capital as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, good cash flow from operations, expanding profit margins and increase in stock price during the past year. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • PFLT's very impressive revenue growth greatly exceeded the industry average of 1.0%. Since the same quarter one year prior, revenues leaped by 64.2%. 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 Capital Markets industry. The net income increased by 215.4% when compared to the same quarter one year prior, rising from $1.57 million to $4.94 million.
  • Net operating cash flow has significantly increased by 153.15% to $27.18 million when compared to the same quarter last year. In addition, PENNANTPARK FLOATING RT CAP has also vastly surpassed the industry average cash flow growth rate of -227.20%.
  • The gross profit margin for PENNANTPARK FLOATING RT CAP is rather high; currently it is at 68.48%. Regardless of PFLT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PFLT's net profit margin of 64.44% significantly outperformed against the industry.
  • 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 Capital Markets industry and the overall market on the basis of return on equity, PENNANTPARK FLOATING RT CAP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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Hercules Technology Growth Capital

Dividend Yield: 7.80%

Hercules Technology Growth Capital (NYSE: HTGC) shares currently have a dividend yield of 7.80%.

Hercules Technology Growth Capital, Inc. The company has a P/E ratio of 9.58.

The average volume for Hercules Technology Growth Capital has been 372,700 shares per day over the past 30 days. Hercules Technology Growth Capital has a market cap of $1.0 billion and is part of the real estate industry. Shares are down 1.6% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Hercules Technology Growth Capital as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins 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 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 Capital Markets industry and the overall market, HERCULES TECH GROWTH CAP INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for HERCULES TECH GROWTH CAP INC is currently very high, coming in at 83.24%. Regardless of HTGC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HTGC's net profit margin of 38.79% significantly outperformed against the industry.
  • HTGC, with its decline in revenue, slightly underperformed the industry average of 1.0%. Since the same quarter one year prior, revenues slightly dropped by 1.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • In its most recent trading session, HTGC 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. 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.
  • HERCULES TECH GROWTH CAP INC's earnings per share declined by 41.2% 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, HERCULES TECH GROWTH CAP INC increased its bottom line by earning $1.62 versus $0.92 in the prior year. For the next year, the market is expecting a contraction of 25.9% in earnings ($1.20 versus $1.62).

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