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."

BlackRock Kelso Capital Corporation

Dividend Yield: 10.40%

BlackRock Kelso Capital Corporation (NASDAQ: BKCC) shares currently have a dividend yield of 10.40%.

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 5.64.

The average volume for BlackRock Kelso Capital Corporation has been 373,000 shares per day over the past 30 days. BlackRock Kelso Capital Corporation has a market cap of $600.9 million and is part of the financial services industry. Shares are down 1.7% year-to-date as of the close of trading on Friday.

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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 revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and compelling growth 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:
  • BKCC's revenue growth has slightly outpaced the industry average of 0.2%. Since the same quarter one year prior, revenues slightly increased by 5.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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.
  • The gross profit margin for BLACKROCK KELSO CAPITAL CORP is currently very high, coming in at 75.81%. It has increased significantly from the same period last year. Along with this, the net profit margin of 87.35% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 53.03% to -$51.77 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 -217.06%.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Capital Markets industry average. The net income increased by 46.0% when compared to the same quarter one year prior, rising from $19.84 million to $28.97 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Main Street Capital Corporation

Dividend Yield: 7.30%

Main Street Capital Corporation (NYSE: MAIN) shares currently have a dividend yield of 7.30%.

Main Street Capital Corporation is a business development company specializing in long- term equity, equity related, and debt investments in small and lower middle market companies. The company has a P/E ratio of 12.73.

The average volume for Main Street Capital Corporation has been 221,600 shares per day over the past 30 days. Main Street Capital Corporation has a market cap of $1.3 billion and is part of the financial services industry. Shares are down 4.7% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates Main Street Capital Corporation as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.2%. Since the same quarter one year prior, revenues rose by 22.6%. 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.
  • The gross profit margin for MAIN STREET CAPITAL CORP is currently very high, coming in at 84.84%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 59.33% significantly outperformed against the industry average.
  • Net operating cash flow has decreased to -$20.32 million or 14.54% when compared to the same quarter last year. Despite a decrease in cash flow of 14.54%, MAIN STREET CAPITAL CORP is still significantly exceeding the industry average of -217.06%.
  • 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, MAIN STREET CAPITAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The share price of MAIN STREET CAPITAL CORP has not done very well: it is down 19.39% 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.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

New Mountain Finance

Dividend Yield: 9.40%

New Mountain Finance (NYSE: NMFC) shares currently have a dividend yield of 9.40%.

New Mountain Finance Corporation operates as a closed-end, non-diversified management investment company. The company has a P/E ratio of 10.08.

The average volume for New Mountain Finance has been 446,900 shares per day over the past 30 days. New Mountain Finance has a market cap of $841.0 million and is part of the financial services industry. Shares are down 2.8% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates New Mountain Finance as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • NMFC's very impressive revenue growth greatly exceeded the industry average of 0.2%. Since the same quarter one year prior, revenues leaped by 57.7%. 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.
  • The gross profit margin for NEW MOUNTAIN FINANCE CORP is currently very high, coming in at 75.68%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 21.35% trails 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. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, NEW MOUNTAIN FINANCE CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • In its most recent trading session, NMFC 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. 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.
  • Net operating cash flow has significantly decreased to -$13.10 million or 120.72% when compared to the same quarter last year. Despite a decrease in cash flow of 120.72%, NEW MOUNTAIN FINANCE CORP is still significantly exceeding the industry average of -217.06%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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