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."

Shaw Communications

Dividend Yield: 4.30%

Shaw Communications (NYSE: SJR) shares currently have a dividend yield of 4.30%.

Shaw Communications Inc., together with its subsidiaries, provides broadband cable television, Internet, digital phone, telecommunication, direct-to-home satellite, satellite distribution, and programming content services to residential and business customers in Canada and the United States. The company has a P/E ratio of 14.24.

The average volume for Shaw Communications has been 458,000 shares per day over the past 30 days. Shaw Communications has a market cap of $10.0 billion and is part of the media industry. Shares are down 17.2% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Shaw Communications as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, expanding profit margins and notable return on equity. 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 7.3%. Since the same quarter one year prior, revenues slightly increased by 5.2%. 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 $442.00 million or 7.54% when compared to the same quarter last year. Despite an increase in cash flow, SHAW COMMUNICATIONS INC's cash flow growth rate is still lower than the industry average growth rate of 47.79%.
  • 39.50% is the gross profit margin for SHAW COMMUNICATIONS INC which we consider to be strong. Regardless of SJR'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 12.01% trails the industry average.
  • SHAW COMMUNICATIONS INC's earnings per share declined by 26.1% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, SHAW COMMUNICATIONS INC increased its bottom line by earning $1.84 versus $1.63 in the prior year.

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Starwood Property

Dividend Yield: 8.00%

Starwood Property (NYSE: STWD) shares currently have a dividend yield of 8.00%.

Starwood Property Trust, Inc. originates, acquires, finances, and manages commercial mortgage loans, other commercial real estate debt investments, commercial mortgage-backed securities, and other commercial real estate-related debt investments in the United States and Europe. The company has a P/E ratio of 10.67.

The average volume for Starwood Property has been 2,271,700 shares per day over the past 30 days. Starwood Property has a market cap of $5.4 billion and is part of the real estate industry. Shares are up 4.2% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Starwood Property as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, expanding profit margins, notable return on equity and increase in stock price during the past year. 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 1.4%. 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 gross profit margin for STARWOOD PROPERTY TRUST INC is rather high; currently it is at 56.21%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 49.38% significantly outperformed against the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, STARWOOD PROPERTY TRUST INC's return on equity is below that of both the industry average and the S&P 500.
  • In its most recent trading session, STWD 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. 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.

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Old Republic International Corporation

Dividend Yield: 4.90%

Old Republic International Corporation (NYSE: ORI) shares currently have a dividend yield of 4.90%.

Old Republic International Corporation, through its subsidiaries, engages in the insurance underwriting and related services business primarily in the United States and Canada. The company has a P/E ratio of 10.51.

The average volume for Old Republic International Corporation has been 1,068,000 shares per day over the past 30 days. Old Republic International Corporation has a market cap of $3.9 billion and is part of the insurance industry. Shares are up 4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Old Republic International Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. 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:
  • ORI's revenue growth has slightly outpaced the industry average of 3.0%. Since the same quarter one year prior, revenues slightly increased by 3.3%. 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.
  • Although ORI's debt-to-equity ratio of 0.25 is very low, it is currently higher than that of 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 Insurance industry and the overall market on the basis of return on equity, OLD REPUBLIC INTL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The share price of OLD REPUBLIC INTL CORP has not done very well: it is down 6.76% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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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