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 "Buy."

Digital Realty

Dividend Yield: 5.00%

Digital Realty (NYSE: DLR) shares currently have a dividend yield of 5.00%.

Digital Realty Trust, Inc., a real estate investment trust (REIT), through its controlling interest in Digital Realty Trust, L.P., engages in the ownership, acquisition, development, redevelopment, and management of technology-related real estate. The company has a P/E ratio of 68.97.

The average volume for Digital Realty has been 1,109,000 shares per day over the past 30 days. Digital Realty has a market cap of $9.3 billion and is part of the real estate industry. Shares are up 1.8% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Digital Realty as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.1%. Since the same quarter one year prior, revenues slightly increased by 8.5%. 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.
  • Compared to its closing price of one year ago, DLR's share price has jumped by 32.33%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • DIGITAL REALTY TRUST INC 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. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, DIGITAL REALTY TRUST INC reported lower earnings of $0.98 versus $2.10 in the prior year. This year, the market expects an improvement in earnings ($1.12 versus $0.98).
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 161.8% when compared to the same quarter one year ago, falling from $54.70 million to -$33.83 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, DIGITAL REALTY TRUST INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

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HCP

Dividend Yield: 5.30%

HCP (NYSE: HCP) shares currently have a dividend yield of 5.30%.

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 21.88.

The average volume for HCP has been 3,678,100 shares per day over the past 30 days. HCP has a market cap of $19.6 billion and is part of the real estate industry. Shares are down 3.7% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates HCP as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, solid stock price performance 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:
  • HCP's revenue growth has slightly outpaced the industry average of 10.1%. Since the same quarter one year prior, revenues rose by 11.5%. 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.
  • Net operating cash flow has increased to $365.60 million or 19.74% when compared to the same quarter last year. In addition, HCP INC has also modestly surpassed the industry average cash flow growth rate of 11.97%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
  • The gross profit margin for HCP INC is rather high; currently it is at 56.56%. 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, the net profit margin of 32.03% trails the industry average.
  • HCP INC's earnings per share declined by 15.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, HCP INC reported lower earnings of $1.95 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($2.03 versus $1.95).

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Enbridge Energy Partners

Dividend Yield: 6.30%

Enbridge Energy Partners (NYSE: EEP) shares currently have a dividend yield of 6.30%.

Enbridge Energy Partners, L.P. owns and operates crude oil and liquid petroleum transportation and storage assets; and natural gas gathering, treating, processing, transportation, and marketing assets in the United States. It operates through two segments, Liquids and Natural Gas. The company has a P/E ratio of 53.99.

The average volume for Enbridge Energy Partners has been 1,013,900 shares per day over the past 30 days. Enbridge Energy Partners has a market cap of $9.2 billion and is part of the energy industry. Shares are down 8.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Enbridge Energy Partners as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 19.6%. Since the same quarter one year prior, revenues slightly increased by 5.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ENBRIDGE ENERGY PRTNRS -LP reported significant earnings per share improvement 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 year. We feel that this trend should continue. During the past fiscal year, ENBRIDGE ENERGY PRTNRS -LP turned its bottom line around by earning $0.67 versus -$0.38 in the prior year. This year, the market expects an improvement in earnings ($1.02 versus $0.67).
  • 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 2541.8% when compared to the same quarter one year prior, rising from $9.10 million to $240.40 million.
  • 41.03% is the gross profit margin for ENBRIDGE ENERGY PRTNRS -LP which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 11.60% is above that of the industry average.
  • Net operating cash flow has increased to $325.10 million or 20.45% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.68%.

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