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."

Home Properties

Dividend Yield: 4.40%

Home Properties (NYSE: HME) shares currently have a dividend yield of 4.40%.

Home Properties, Inc. is an independent real estate investment trust. The firm invests in the real estate markets of the United States. It is engaged in the ownership, management, acquisition, rehabilitation and development of residential apartment communities. The company has a P/E ratio of 43.31.

The average volume for Home Properties has been 398,900 shares per day over the past 30 days. Home Properties has a market cap of $4.0 billion and is part of the real estate industry. Shares are up 5.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Home Properties as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, reasonable valuation levels, notable return on equity and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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.
  • 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 6.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Real Estate Investment Trusts (REITs) industry average, but is greater than that of the S&P 500. The net income increased by 16.7% when compared to the same quarter one year prior, going from $56.92 million to $66.43 million.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, HOME PROPERTIES INC's return on equity is below that of both the industry average and the S&P 500.

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Government Properties Income

Dividend Yield: 7.50%

Government Properties Income (NYSE: GOV) shares currently have a dividend yield of 7.50%.

Government Properties Income Trust is a real estate investment trust managed by Reit Management & Research LLC. The trust engages in investment, operation and maintenance of real estate assets. Its properties are primarily leased to United States federal and state government agencies. The company has a P/E ratio of 26.57.

The average volume for Government Properties Income has been 674,800 shares per day over the past 30 days. Government Properties Income has a market cap of $1.6 billion and is part of the real estate industry. Shares are down 0.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Government Properties Income as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, good cash flow from operations and increase in net income. 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 10.1%. Since the same quarter one year prior, revenues rose by 21.0%. 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 increased to $38.68 million or 48.49% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 13.05%.
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Real Estate Investment Trusts (REITs) industry average. The net income increased by 10.9% when compared to the same quarter one year prior, going from $12.72 million to $14.11 million.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, GOV has underperformed the S&P 500 Index, declining 8.70% from its price level of one year ago. 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.

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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 53.75.

The average volume for Enbridge Energy Partners has been 978,500 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 10.6% year-to-date as of the close of trading on Wednesday.

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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 19.9%. 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 -13.05%.

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