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."

Medallion Financial

Dividend Yield: 9.40%

Medallion Financial (NASDAQ: TAXI) shares currently have a dividend yield of 9.40%.

Medallion Financial Corp., through its subsidiaries, operates as a specialty finance company in the United States. The company engages in originating, acquiring, and servicing loans that finance taxicab medallions and various types of commercial businesses. The company has a P/E ratio of 9.21.

The average volume for Medallion Financial has been 195,000 shares per day over the past 30 days. Medallion Financial has a market cap of $253.2 million and is part of the financial services industry. Shares are up 2.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Medallion Financial as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.3%. 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 22.1% when compared to the same quarter one year prior, going from $6.66 million to $8.13 million.
  • MEDALLION FINANCIAL CORP has improved earnings per share by 10.3% 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, MEDALLION FINANCIAL CORP reported lower earnings of $1.14 versus $1.16 in the prior year. This year, the market expects an improvement in earnings ($1.18 versus $1.14).
  • 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 Capital Markets industry and the overall market, MEDALLION FINANCIAL CORP's return on equity is below that of both the industry average and the S&P 500.
  • TAXI has underperformed the S&P 500 Index, declining 24.51% 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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Ship Finance International

Dividend Yield: 11.10%

Ship Finance International (NYSE: SFL) shares currently have a dividend yield of 11.10%.

Ship Finance International Limited owns and operates vessels and offshore related assets in Bermuda, Cyprus, Malta, Liberia, Norway, Singapore, the United Kingdom, and the Marshall Islands. It is also involved in the charter, purchase, and sale of assets. The company has a P/E ratio of 15.29.

The average volume for Ship Finance International has been 554,900 shares per day over the past 30 days. Ship Finance International has a market cap of $1.4 billion and is part of the transportation industry. Shares are up 10.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Ship Finance International as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 19.6%. Since the same quarter one year prior, revenues rose by 23.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SHIP FINANCE INTL LTD has improved earnings per share by 35.0% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, SHIP FINANCE INTL LTD increased its bottom line by earning $1.25 versus $1.01 in the prior year. This year, the market expects an improvement in earnings ($1.37 versus $1.25).
  • SFL has underperformed the S&P 500 Index, declining 13.47% 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.
  • Currently the debt-to-equity ratio of 1.50 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated.

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Whitestone REIT

Dividend Yield: 7.20%

Whitestone REIT (NYSE: WSR) shares currently have a dividend yield of 7.20%.

WhiteStone REIT is a Maryland REIT engaged in owning and operating commercial properties in culturally diverse markets in major metropolitan areas. The company has a P/E ratio of 71.68.

The average volume for Whitestone REIT has been 80,100 shares per day over the past 30 days. Whitestone REIT has a market cap of $360.2 million and is part of the real estate industry. Shares are up 4.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Whitestone REIT as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • WSR's revenue growth has slightly outpaced the industry average of 10.1%. Since the same quarter one year prior, revenues rose by 11.7%. 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 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 126.6% when compared to the same quarter one year prior, rising from $1.26 million to $2.86 million.
  • WHITESTONE REIT's earnings per share declined by 50.0% 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, WHITESTONE REIT increased its bottom line by earning $0.24 versus $0.21 in the prior year. This year, the market expects an improvement in earnings ($0.26 versus $0.24).
  • The gross profit margin for WHITESTONE REIT is rather low; currently it is at 20.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 14.86% significantly trails the industry average.
  • Net operating cash flow has decreased to $5.77 million or 36.95% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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