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."

Six Flags Entertainment

Dividend Yield: 4.30%

Six Flags Entertainment (NYSE: SIX) shares currently have a dividend yield of 4.30%.

Six Flags Entertainment Corporation owns and operates regional theme, water, and zoological parks. Its parks offer various thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues, and retail outlets. The company has a P/E ratio of 74.35.

The average volume for Six Flags Entertainment has been 707,100 shares per day over the past 30 days. Six Flags Entertainment has a market cap of $4.6 billion and is part of the leisure industry. Shares are up 12% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Six Flags Entertainment as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and solid stock price performance. 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 7.9%. Since the same quarter one year prior, revenues rose by 15.5%. 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, SIX FLAGS ENTERTAINMENT CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • SIX FLAGS ENTERTAINMENT CORP's earnings per share declined by 17.2% 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 two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SIX FLAGS ENTERTAINMENT CORP reported lower earnings of $0.73 versus $1.20 in the prior year. This year, the market expects an improvement in earnings ($1.62 versus $0.73).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry average. The net income has decreased by 14.9% when compared to the same quarter one year ago, dropping from -$61.20 million to -$70.33 million.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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Plains All American Pipeline

Dividend Yield: 5.30%

Plains All American Pipeline (NYSE: PAA) shares currently have a dividend yield of 5.30%.

Plains All American Pipeline, L.P., through with its subsidiaries, engages in the transportation, storage, terminalling, and marketing of crude oil, natural gas liquids (NGL), natural gas, and refined products in the United States and Canada. The company has a P/E ratio of 21.70.

The average volume for Plains All American Pipeline has been 1,528,400 shares per day over the past 30 days. Plains All American Pipeline has a market cap of $19.4 billion and is part of the energy industry. Shares are up 0.6% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Plains All American Pipeline as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster 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 Oil, Gas & Consumable Fuels industry. The net income increased by 26.2% when compared to the same quarter one year prior, rising from $309.00 million to $390.00 million.
  • Net operating cash flow has significantly increased by 101.66% to $726.00 million when compared to the same quarter last year. In addition, PLAINS ALL AMER PIPELNE -LP has also vastly surpassed the industry average cash flow growth rate of -13.13%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 20.3%. Since the same quarter one year prior, revenues fell by 11.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • PLAINS ALL AMER PIPELNE -LP has improved earnings per share by 15.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PLAINS ALL AMER PIPELNE -LP reported lower earnings of $2.37 versus $2.80 in the prior year. For the next year, the market is expecting a contraction of 7.8% in earnings ($2.19 versus $2.37).
  • The gross profit margin for PLAINS ALL AMER PIPELNE -LP is currently extremely low, coming in at 7.37%. Regardless of PAA's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PAA's net profit margin of 4.12% compares favorably to the industry average.

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PacWest Bancorp

Dividend Yield: 4.40%

PacWest Bancorp (NASDAQ: PACW) shares currently have a dividend yield of 4.40%.

PacWest Bancorp operates as the holding company for Pacific Western Bank that provides commercial banking products and services to individuals, professionals, and small to mid-sized businesses in the United States. It accepts demand, money market, and time deposits. The company has a P/E ratio of 21.77.

The average volume for PacWest Bancorp has been 713,200 shares per day over the past 30 days. PacWest Bancorp has a market cap of $4.7 billion and is part of the banking industry. Shares are down 0.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates PacWest Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • PACW's very impressive revenue growth greatly exceeded the industry average of 0.4%. Since the same quarter one year prior, revenues leaped by 157.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PACWEST BANCORP has improved earnings per share by 24.6% 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 two years. We feel that this trend should continue. During the past fiscal year, PACWEST BANCORP increased its bottom line by earning $1.97 versus $1.08 in the prior year. This year, the market expects an improvement in earnings ($2.79 versus $1.97).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 191.4% when compared to the same quarter one year prior, rising from $25.08 million to $73.08 million.
  • The gross profit margin for PACWEST BANCORP is currently very high, coming in at 86.53%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, PACW's net profit margin of 31.07% significantly outperformed against the industry.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's 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 the other strengths this company displays justify these higher price levels.

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