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."

Fidus Investment

Dividend Yield: 9.20%

Fidus Investment (NASDAQ: FDUS) shares currently have a dividend yield of 9.20%.

Fidus Investment Corporation operates as an externally managed, closed-end, and non-diversified management investment company. The company provides customized debt and equity financing solutions to lower middle-market companies in the United States. The company has a P/E ratio of 7.42.

The average volume for Fidus Investment has been 68,800 shares per day over the past 30 days. Fidus Investment has a market cap of $264.9 million and is part of the financial services industry. Shares are up 11.5% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Fidus Investment 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 also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 21.4%. Growth in the company's revenue appears to have helped boost 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 60.1% when compared to the same quarter one year prior, rising from $4.61 million to $7.38 million.
  • FIDUS INVESTMENT CORP has improved earnings per share by 35.3% 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, FIDUS INVESTMENT CORP reported lower earnings of $1.34 versus $2.01 in the prior year. This year, the market expects an improvement in earnings ($1.67 versus $1.34).
  • 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 Capital Markets industry and the overall market, FIDUS INVESTMENT CORP's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$42.87 million or 90.75% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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Resource Capital

Dividend Yield: 14.30%

Resource Capital (NYSE: RSO) shares currently have a dividend yield of 14.30%.

Resource Capital Corp., a diversified real estate investment trust, primarily focuses on originating, holding, and managing commercial mortgage loans and other commercial real estate-related debt and equity investments in the United States. The company has a P/E ratio of 13.18.

The average volume for Resource Capital has been 732,800 shares per day over the past 30 days. Resource Capital has a market cap of $600.7 million and is part of the real estate industry. Shares are down 10.9% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Resource Capital as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing 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 Real Estate Investment Trusts (REITs) industry. The net income increased by 996.0% when compared to the same quarter one year prior, rising from $1.17 million to $12.78 million.
  • 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 7.5%. 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 RESOURCE CAPITAL CORP is rather high; currently it is at 52.51%. Regardless of RSO'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 28.34% trails 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, RESOURCE CAPITAL CORP's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$59.73 million or 3859.03% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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Anworth Mortgage Asset

Dividend Yield: 11.40%

Anworth Mortgage Asset (NYSE: ANH) shares currently have a dividend yield of 11.40%.

Anworth Mortgage Asset Corporation operates as a real estate investment trust in the United States. The company has a P/E ratio of 29.28.

The average volume for Anworth Mortgage Asset has been 818,400 shares per day over the past 30 days. Anworth Mortgage Asset has a market cap of $560.0 million and is part of the real estate industry. Shares are up 0.6% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Anworth Mortgage Asset as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The gross profit margin for ANWORTH MTG ASSET CORP is currently very high, coming in at 89.29%. Regardless of ANH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ANH's net profit margin of -40.61% significantly underperformed when compared to the industry average.
  • 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 228.8% when compared to the same quarter one year ago, falling from $11.09 million to -$14.29 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, ANWORTH MTG ASSET CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.

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