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."

GlaxoSmithKline

Dividend Yield: 5.30%

GlaxoSmithKline (NYSE: GSK) shares currently have a dividend yield of 5.30%.

GlaxoSmithKline plc creates, discovers, develops, manufactures, and markets pharmaceutical products, such as vaccines, over-the-counter medicines, and health-related consumer products worldwide. The company has a P/E ratio of 15.90.

The average volume for GlaxoSmithKline has been 5,000,300 shares per day over the past 30 days. GlaxoSmithKline has a market cap of $111.2 billion and is part of the drugs industry. Shares are down 13.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates GlaxoSmithKline as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity 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:
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, GLAXOSMITHKLINE PLC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • GLAXOSMITHKLINE PLC 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, GLAXOSMITHKLINE PLC increased its bottom line by earning $3.68 versus $2.92 in the prior year. This year, the market expects an improvement in earnings ($98.03 versus $3.68).
  • GSK, with its decline in revenue, underperformed when compared the industry average of 8.7%. Since the same quarter one year prior, revenues fell by 35.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for GLAXOSMITHKLINE PLC is rather high; currently it is at 66.18%. Regardless of GSK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GSK's net profit margin of 6.95% is significantly lower than the industry average.
  • The share price of GLAXOSMITHKLINE PLC has not done very well: it is down 12.10% 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, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

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Pembina Pipeline

Dividend Yield: 4.10%

Pembina Pipeline (NYSE: PBA) shares currently have a dividend yield of 4.10%.

Pembina Pipeline Corporation provides transportation and midstream services for the energy industry in North America. It operates through four segments: Conventional Pipelines, Oil Sands and Heavy Oil, Gas Services, and Midstream. The company has a P/E ratio of 37.03.

The average volume for Pembina Pipeline has been 352,700 shares per day over the past 30 days. Pembina Pipeline has a market cap of $12.7 billion and is part of the energy industry. Shares are up 8.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Pembina Pipeline 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, reasonable valuation levels, good cash flow from operations 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:
  • The revenue growth came in higher than the industry average of 6.4%. Since the same quarter one year prior, revenues rose by 11.1%. 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 current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.31, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 115.34% to $188.00 million when compared to the same quarter last year. In addition, PEMBINA PIPELINE CORP has also vastly surpassed the industry average cash flow growth rate of -2.19%.
  • The net income growth 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 increased by 4.3% when compared to the same quarter one year prior, going from $71.90 million to $75.00 million.

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EnLink Midstream Partners

Dividend Yield: 5.20%

EnLink Midstream Partners (NYSE: ENLK) shares currently have a dividend yield of 5.20%.

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 676,100 shares per day over the past 30 days. EnLink Midstream Partners has a market cap of $6.6 billion and is part of the energy industry. Shares are up 3.6% year-to-date as of the close of trading on Wednesday.

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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, impressive record of earnings per share growth, compelling growth in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • ENLK's very impressive revenue growth greatly exceeded the industry average of 6.4%. Since the same quarter one year prior, revenues leaped by 81.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ENLINK MIDSTREAM PARTNERS LP 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 year. We feel that this trend should continue. During the past fiscal year, ENLINK MIDSTREAM PARTNERS LP continued to lose money by earning -$0.97 versus -$1.01 in the prior year. This year, the market expects an improvement in earnings ($0.54 versus -$0.97).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 155.8% when compared to the same quarter one year prior, rising from -$78.84 million to $44.00 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • The gross profit margin for ENLINK MIDSTREAM PARTNERS LP is rather low; currently it is at 20.95%. Regardless of ENLK's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.16% trails the industry average.

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