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: 8.10%

Starwood Property (NYSE: STWD) shares currently have a dividend yield of 8.10%.

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 10.36.

The average volume for Starwood Property has been 1,770,500 shares per day over the past 30 days. Starwood Property has a market cap of $5.3 billion and is part of the real estate industry. Shares are up 0.9% year-to-date as of the close of trading on Tuesday.

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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 13.4%. 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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EnLink Midstream Partners

Dividend Yield: 5.10%

EnLink Midstream Partners (NYSE: ENLK) shares currently have a dividend yield of 5.10%.

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 785,400 shares per day over the past 30 days. EnLink Midstream Partners has a market cap of $6.7 billion and is part of the energy industry. Shares are down 0.1% year-to-date as of the close of trading on Tuesday.

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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, compelling growth in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. 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 greatly exceeded the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 47.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ENLINK MIDSTREAM PARTNERS LP has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. 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 -$0.38 versus -$1.01 in the prior year. This year, the market expects an improvement in earnings ($0.54 versus -$0.38).
  • 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 45.2% when compared to the same quarter one year prior, rising from $30.30 million to $44.00 million.
  • Net operating cash flow has significantly increased by 502.61% to $160.70 million when compared to the same quarter last year. In addition, ENLINK MIDSTREAM PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -1.81%.
  • 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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.99 is somewhat weak and could be cause for future problems.

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

AT&T

Dividend Yield: 5.60%

AT&T (NYSE: T) shares currently have a dividend yield of 5.60%.

AT&T Inc. provides telecommunications services to consumers and businesses in the United States and internationally. The company has a P/E ratio of 10.40.

The average volume for AT&T has been 24,046,500 shares per day over the past 30 days. AT&T has a market cap of $175.3 billion and is part of the telecommunications industry. Shares are up 1.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates AT&T as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, 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:
  • T's revenue growth has slightly outpaced the industry average of 0.9%. Since the same quarter one year prior, revenues slightly increased by 2.5%. 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 debt-to-equity ratio is somewhat low, currently at 0.82, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.40 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 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 Diversified Telecommunication Services industry and the overall market on the basis of return on equity, AT&T INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The gross profit margin for AT&T INC is rather high; currently it is at 55.88%. Regardless of T's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.10% trails the industry average.

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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