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."

Apollo Investment

Dividend Yield: 11.10%

Apollo Investment (NASDAQ: AINV) shares currently have a dividend yield of 11.10%.

Apollo Investment Corporation is business development company and operates as a closed-end management investment company. The company invests in middle market companies. It provides direct equity capital, mezzanine and senior secured loans, and subordinated debt and loans. The company has a P/E ratio of 6.03.

The average volume for Apollo Investment has been 2,180,400 shares per day over the past 30 days. Apollo Investment has a market cap of $1.7 billion and is part of the financial services industry. Shares are down 3.2% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Apollo Investment 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 sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 11.7%. Since the same quarter one year prior, revenues rose by 26.9%. 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 APOLLO INVESTMENT CORP is currently very high, coming in at 71.18%. Regardless of AINV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AINV's net profit margin of 35.29% significantly outperformed against the industry.
  • 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 on the basis of return on equity, APOLLO INVESTMENT CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • APOLLO INVESTMENT CORP's earnings per share declined by 45.5% 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, APOLLO INVESTMENT CORP increased its bottom line by earning $1.17 versus $0.49 in the prior year. For the next year, the market is expecting a contraction of 17.9% in earnings ($0.96 versus $1.17).
  • Net operating cash flow has significantly decreased to $33.88 million or 63.47% when compared to the same quarter last year. Despite a decrease in cash flow APOLLO INVESTMENT CORP is still fairing well by exceeding its industry average cash flow growth rate of -75.50%.

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Genesis Energy

Dividend Yield: 5.40%

Genesis Energy (NYSE: GEL) shares currently have a dividend yield of 5.40%.

Genesis Energy, L.P. operates in the midstream segment of the oil and gas industry in the Gulf Coast region of the United States. The company operates in three segments: Pipeline Transportation, Refinery Services, and Supply and Logistics. The company has a P/E ratio of 40.87.

The average volume for Genesis Energy has been 502,500 shares per day over the past 30 days. Genesis Energy has a market cap of $4.1 billion and is part of the energy industry. Shares are up 5.1% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Genesis Energy as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, reasonable valuation levels, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • 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 57.6% when compared to the same quarter one year prior, rising from $18.47 million to $29.11 million.
  • Net operating cash flow has significantly increased by 659.45% to $102.92 million when compared to the same quarter last year. In addition, GENESIS ENERGY -LP has also vastly surpassed the industry average cash flow growth rate of -2.42%.
  • GENESIS ENERGY -LP reported significant earnings per share improvement 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, GENESIS ENERGY -LP reported lower earnings of $1.00 versus $1.23 in the prior year. This year, the market expects an improvement in earnings ($1.25 versus $1.00).
  • GEL, with its decline in revenue, slightly underperformed the industry average of 6.7%. Since the same quarter one year prior, revenues fell by 11.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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

HCP

Dividend Yield: 4.50%

HCP (NYSE: HCP) shares currently have a dividend yield of 4.50%.

HCP, Inc. is an independent hybrid real estate investment trust. The fund invests in real estate markets of the United States. The company has a P/E ratio of 23.66.

The average volume for HCP has been 2,849,000 shares per day over the past 30 days. HCP has a market cap of $22.1 billion and is part of the real estate industry. Shares are up 9.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates HCP as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, expanding profit margins and good cash flow from operations. 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:
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • HCP INC has improved earnings per share by 10.2% 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, HCP INC increased its bottom line by earning $1.97 versus $1.80 in the prior year. This year, the market expects an improvement in earnings ($2.05 versus $1.97).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.5%. Since the same quarter one year prior, revenues slightly increased by 8.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for HCP INC is rather high; currently it is at 53.97%. Regardless of HCP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HCP's net profit margin of 40.81% significantly outperformed against the industry.
  • Net operating cash flow has slightly increased to $275.32 million or 1.19% when compared to the same quarter last year. Despite an increase in cash flow, HCP INC's average is still marginally south of the industry average growth rate of 5.30%.

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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