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 "Hold."

TCP Capital

Dividend Yield: 8.90%

TCP Capital (NASDAQ: TCPC) shares currently have a dividend yield of 8.90%.

TCP Capital Corp. is a business development company specializing in direct equity and debt investments in middle-market, senior secured loans, junior loans, originated loans, mezzanine, senior debt instruments, bonds, and secondary-market investments. It seeks to invest in the United States. The company has a P/E ratio of 10.43.

The average volume for TCP Capital has been 361,600 shares per day over the past 30 days. TCP Capital has a market cap of $692.2 million and is part of the financial services industry. Shares are down 4.6% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates TCP Capital as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • TCPC's very impressive revenue growth greatly exceeded the industry average of 1.6%. Since the same quarter one year prior, revenues leaped by 57.3%. 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 gross profit margin for TCP CAPITAL CORP is currently very high, coming in at 81.95%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 43.50% significantly outperformed against the industry average.
  • TCP CAPITAL CORP's earnings per share declined by 39.6% 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, TCP CAPITAL CORP increased its bottom line by earning $1.94 versus $1.20 in the prior year. For the next year, the market is expecting a contraction of 20.1% in earnings ($1.55 versus $1.94).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has decreased by 11.0% when compared to the same quarter one year ago, dropping from $13.30 million to $11.83 million.
  • 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. When compared to other companies in the Capital Markets industry and the overall market, TCP CAPITAL CORP's return on equity is below that of both the industry average and the S&P 500.

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Triangle Capital Corporation

Dividend Yield: 10.10%

Triangle Capital Corporation (NYSE: TCAP) shares currently have a dividend yield of 10.10%.

Triangle Capital Corporation is a business development company specializing in private equity and mezzanine investments. The company has a P/E ratio of 10.68.

The average volume for Triangle Capital Corporation has been 346,000 shares per day over the past 30 days. Triangle Capital Corporation has a market cap of $706.2 million and is part of the financial services industry. Shares are up 5.4% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Triangle Capital Corporation as a hold. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The gross profit margin for TRIANGLE CAPITAL CORP is currently very high, coming in at 83.30%. 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 -35.42% is in-line with the industry average.
  • TCAP, with its decline in revenue, underperformed when compared the industry average of 1.6%. Since the same quarter one year prior, revenues slightly dropped by 8.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • TRIANGLE CAPITAL CORP 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, TRIANGLE CAPITAL CORP increased its bottom line by earning $2.94 versus $2.23 in the prior year. For the next year, the market is expecting a contraction of 30.9% in earnings ($2.03 versus $2.94).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 138.0% when compared to the same quarter one year ago, falling from $23.17 million to -$8.81 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Capital Markets industry and the overall market, TRIANGLE CAPITAL CORP's return on equity is below that of both the industry average and the S&P 500.

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Mesabi

Dividend Yield: 19.80%

Mesabi (NYSE: MSB) shares currently have a dividend yield of 19.80%.

Mesabi Trust is engaged in iron ore mining. The company produces iron ore pellets. It primarily holds interests in certain properties in the Mesabi Iron Range. Mesabi Trust was founded in 1919 and is based in New York, New York. The company has a P/E ratio of 9.61.

The average volume for Mesabi has been 78,400 shares per day over the past 30 days. Mesabi has a market cap of $233.1 million and is part of the financial services industry. Shares are up 3% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Mesabi as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • MSB's very impressive revenue growth greatly exceeded the industry average of 4.0%. Since the same quarter one year prior, revenues leaped by 85.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MSB has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. 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.
  • The gross profit margin for MESABI TRUST is currently very high, coming in at 100.00%. MSB has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, MSB's net profit margin of 97.94% significantly outperformed against the industry.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, MESABI TRUST's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • MSB has underperformed the S&P 500 Index, declining 18.92% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

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