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."

Stag Industrial

Dividend Yield: 6.80%

Stag Industrial (NYSE: STAG) shares currently have a dividend yield of 6.80%.

STAG Industrial, Inc. is a real estate investment trust. The firm invests in the real estate markets of United States. It is engaged in investment and management of real estate assets. STAG Industrial, Inc. was founded on July 21, 2010 and is based in Boston, Massachusetts.

The average volume for Stag Industrial has been 549,500 shares per day over the past 30 days. Stag Industrial has a market cap of $1.3 billion and is part of the real estate industry. Shares are down 16.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Stag Industrial as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 8.6%. Since the same quarter one year prior, revenues rose by 28.3%. 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.
  • Net operating cash flow has significantly increased by 50.16% to $21.82 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 2.12%.
  • STAG INDUSTRIAL INC's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, STAG INDUSTRIAL INC reported poor results of -$0.27 versus -$0.21 in the prior year. This year, the market expects an improvement in earnings (-$0.15 versus -$0.27).
  • 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, STAG INDUSTRIAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for STAG INDUSTRIAL INC is currently extremely low, coming in at 12.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.41% is significantly below that of the industry average.

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HCP

Dividend Yield: 6.10%

HCP (NYSE: HCP) shares currently have a dividend yield of 6.10%.

HCP, Inc. is an independent hybrid real estate investment trust. The fund invests in real estate markets of the United States. The company has a P/E ratio of 40.20.

The average volume for HCP has been 3,193,900 shares per day over the past 30 days. HCP has a market cap of $17.1 billion and is part of the real estate industry. Shares are down 15.7% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates HCP as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, 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:
  • HCP's revenue growth has slightly outpaced the industry average of 8.6%. Since the same quarter one year prior, revenues rose by 14.7%. 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 gross profit margin for HCP INC is rather high; currently it is at 56.55%. Regardless of HCP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HCP's net profit margin of -38.53% 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 192.9% when compared to the same quarter one year ago, falling from $259.11 million to -$240.61 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, HCP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

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Blackstone Mortgage

Dividend Yield: 7.30%

Blackstone Mortgage (NYSE: BXMT) shares currently have a dividend yield of 7.30%.

Blackstone Mortgage Trust, Inc., a real estate finance company, originates and purchases senior loans collateralized by properties in North America and Europe. It operates through two segments, Loan Origination and CT Legacy Portfolio. The company has a P/E ratio of 13.41.

The average volume for Blackstone Mortgage has been 1,201,300 shares per day over the past 30 days. Blackstone Mortgage has a market cap of $2.3 billion and is part of the real estate industry. Shares are down 2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Blackstone Mortgage 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 find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • BXMT's very impressive revenue growth greatly exceeded the industry average of 8.6%. Since the same quarter one year prior, revenues leaped by 100.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BLACKSTONE MORTGAGE TR INC 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. This trend suggests that the performance of the business is improving. During the past fiscal year, BLACKSTONE MORTGAGE TR INC turned its bottom line around by earning $1.86 versus -$0.25 in the prior year. This year, the market expects an improvement in earnings ($2.18 versus $1.86).
  • The gross profit margin for BLACKSTONE MORTGAGE TR INC is currently very high, coming in at 78.72%. Regardless of BXMT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BXMT's net profit margin of 52.54% significantly outperformed against the industry.
  • 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, BLACKSTONE MORTGAGE TR INC's return on equity is below that of both the industry average and the S&P 500.
  • In its most recent trading session, BXMT 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. 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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