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

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."

Valley National Bancorp

Dividend Yield: 4.60%

Valley National Bancorp (NYSE: VLY) shares currently have a dividend yield of 4.60%.

Valley National Bancorp operates as the bank holding company for the Valley National Bank that provides commercial, retail, and trust and investment services. The company operates in four segments: Commercial Lending, Consumer Lending, Investment Management, and Corporate and Other Adjustments. The company has a P/E ratio of 17.27.

The average volume for Valley National Bancorp has been 1,745,200 shares per day over the past 30 days. Valley National Bancorp has a market cap of $2.2 billion and is part of the banking industry. Shares are down 1% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Valley National Bancorp 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 a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The gross profit margin for VALLEY NATIONAL BANCORP is currently very high, coming in at 74.67%. Regardless of VLY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VLY's net profit margin of 13.75% compares favorably to the industry average.
  • VLY, with its decline in revenue, slightly underperformed the industry average of 4.6%. Since the same quarter one year prior, revenues slightly dropped by 8.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • VALLEY NATIONAL BANCORP's earnings per share declined by 45.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, VALLEY NATIONAL BANCORP reported lower earnings of $0.57 versus $0.67 in the prior year. This year, the market expects an improvement in earnings ($0.61 versus $0.57).
  • 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 Commercial Banks industry and the overall market, VALLEY NATIONAL BANCORP's return on equity is below that of both the industry average and the S&P 500.
  • In its most recent trading session, VLY 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, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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Verizon Communications

Dividend Yield: 4.40%

Verizon Communications (NYSE: VZ) shares currently have a dividend yield of 4.40%.

Verizon Communications Inc., through its subsidiaries, provides communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide. The company has a P/E ratio of 20.48.

The average volume for Verizon Communications has been 18,610,800 shares per day over the past 30 days. Verizon Communications has a market cap of $205.9 billion and is part of the telecommunications industry. Shares are up 4.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Verizon Communications as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:
  • VZ's revenue growth has slightly outpaced the industry average of 2.6%. Since the same quarter one year prior, revenues slightly increased by 6.8%. 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, VERIZON COMMUNICATIONS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 56.61%. Regardless of VZ's high profit margin, it has managed to decrease from the same period last year.
  • The debt-to-equity ratio is very high at 9.21 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, VZ maintains a poor quick ratio of 0.90, which illustrates the inability to avoid short-term cash problems.
  • Net operating cash flow has decreased to $7,474.00 million or 28.34% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, VERIZON COMMUNICATIONS INC has marginally lower results.

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Bank of Montreal

Dividend Yield: 4.20%

Bank of Montreal (NYSE: BMO) shares currently have a dividend yield of 4.20%.

Bank of Montreal offers various banking products and services in Canada, the United States, and internationally. The company has a P/E ratio of 12.21.

The average volume for Bank of Montreal has been 886,400 shares per day over the past 30 days. Bank of Montreal has a market cap of $39.5 billion and is part of the banking industry. Shares are down 13.3% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Bank of Montreal as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 4.6%. Since the same quarter one year prior, revenues rose by 11.0%. 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.
  • Net operating cash flow has slightly increased to $9,804.00 million or 5.77% when compared to the same quarter last year. Despite an increase in cash flow of 5.77%, BANK OF MONTREAL is still growing at a significantly lower rate than the industry average of 303.10%.
  • The gross profit margin for BANK OF MONTREAL is currently very high, coming in at 73.99%. Regardless of BMO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BMO's net profit margin of 15.80% compares favorably to the industry average.
  • 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 Commercial Banks industry and the overall market on the basis of return on equity, BANK OF MONTREAL has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, BMO has underperformed the S&P 500 Index, declining 6.07% 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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