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."

Starwood Property

Dividend Yield: 8.20%

Starwood Property (NYSE: STWD) shares currently have a dividend yield of 8.20%.

Starwood Property Trust, Inc. originates, acquires, finances, and manages commercial mortgage loans, other commercial real estate debt investments, commercial mortgage-backed securities, and other commercial real estate-related debt investments in the United States and Europe. The company has a P/E ratio of 10.21.

The average volume for Starwood Property has been 1,792,100 shares per day over the past 30 days. Starwood Property has a market cap of $5.2 billion and is part of the real estate industry. Shares are up 1.6% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Starwood Property 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, attractive valuation levels and expanding profit margins. 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:
  • STWD's revenue growth has slightly outpaced the industry average of 13.7%. Since the same quarter one year prior, revenues rose by 21.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • STARWOOD PROPERTY TRUST INC has improved earnings per share by 37.7% 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. We feel that this trend should continue. During the past fiscal year, STARWOOD PROPERTY TRUST INC increased its bottom line by earning $1.89 versus $1.78 in the prior year. This year, the market expects an improvement in earnings ($2.16 versus $1.89).
  • 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 88.9% when compared to the same quarter one year prior, rising from $87.36 million to $165.04 million.
  • The gross profit margin for STARWOOD PROPERTY TRUST INC is rather high; currently it is at 56.45%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 89.12% significantly outperformed against the industry average.

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H&E Equipment Services

Dividend Yield: 4.40%

H&E Equipment Services (NASDAQ: HEES) shares currently have a dividend yield of 4.40%.

H&E Equipment Services, Inc. operates as an integrated equipment services company. The company rents, sells, and provides parts and service support for hi-lift or aerial work platform equipment, crane, earthmoving equipment, and industrial lift truck categories. The company has a P/E ratio of 14.97.

The average volume for H&E Equipment Services has been 451,300 shares per day over the past 30 days. H&E Equipment Services has a market cap of $796.6 million and is part of the diversified services industry. Shares are down 21% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates H&E Equipment Services as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, good cash flow from operations, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • H&E EQUIPMENT SERVICES INC has improved earnings per share by 7.5% 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. We feel that this trend should continue. During the past fiscal year, H&E EQUIPMENT SERVICES INC increased its bottom line by earning $1.26 versus $0.83 in the prior year. This year, the market expects an improvement in earnings ($1.55 versus $1.26).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.3%. Since the same quarter one year prior, revenues slightly increased by 1.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has significantly increased by 228.12% to $68.77 million when compared to the same quarter last year. In addition, H&E EQUIPMENT SERVICES INC has also vastly surpassed the industry average cash flow growth rate of 11.85%.
  • 48.69% is the gross profit margin for H&E EQUIPMENT SERVICES INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.56% trails the industry average.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Trading Companies & Distributors industry average. The net income increased by 9.7% when compared to the same quarter one year prior, going from $13.95 million to $15.30 million.

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PacWest Bancorp

Dividend Yield: 4.60%

PacWest Bancorp (NASDAQ: PACW) shares currently have a dividend yield of 4.60%.

PacWest Bancorp operates as the holding company for Pacific Western Bank that provides commercial banking products and services to individuals, professionals, and small to mid-sized businesses in the United States. It accepts demand, money market, and time deposits. The company has a P/E ratio of 35.09.

The average volume for PacWest Bancorp has been 641,800 shares per day over the past 30 days. PacWest Bancorp has a market cap of $4.4 billion and is part of the banking industry. Shares are down 3.1% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates PacWest Bancorp 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, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • PACW's very impressive revenue growth greatly exceeded the industry average of 5.6%. Since the same quarter one year prior, revenues leaped by 142.2%. 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 significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 157.7% when compared to the same quarter one year prior, rising from $24.16 million to $62.27 million.
  • Net operating cash flow has significantly increased by 295.77% to $96.65 million when compared to the same quarter last year. In addition, PACWEST BANCORP has also vastly surpassed the industry average cash flow growth rate of -66.82%.
  • PACWEST BANCORP has improved earnings per share by 13.2% 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, PACWEST BANCORP reported lower earnings of $1.08 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($1.95 versus $1.08).
  • The gross profit margin for PACWEST BANCORP is currently very high, coming in at 91.51%. Regardless of PACW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PACW's net profit margin of 28.47% compares favorably to the industry average.

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