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."

American Campus Communities

Dividend Yield: 4.10%

American Campus Communities (NYSE: ACC) shares currently have a dividend yield of 4.10%.

American Campus Communities, Inc. is an independent equity real estate investment trust. The firm invests in the real estate markets of the United States. It primarily engages in developing, owning, and managing high-quality student housing communities. The company has a P/E ratio of 40.28.

The average volume for American Campus Communities has been 903,100 shares per day over the past 30 days. American Campus Communities has a market cap of $4.3 billion and is part of the real estate industry. Shares are down 8.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates American Campus Communities as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth, reasonable valuation levels, notable return on equity and increase in net income. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • AMERICAN CAMPUS COMMUNITIES has improved earnings per share by 16.7% 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. During the past fiscal year, AMERICAN CAMPUS COMMUNITIES increased its bottom line by earning $0.55 versus $0.43 in the prior year. This year, the market expects an improvement in earnings ($0.63 versus $0.55).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.0%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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, AMERICAN CAMPUS COMMUNITIES's return on equity is below that of both the industry average and the S&P 500.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Real Estate Investment Trusts (REITs) industry average, but is greater than that of the S&P 500. The net income increased by 15.9% when compared to the same quarter one year prior, going from $13.44 million to $15.58 million.

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Home Properties

Dividend Yield: 4.20%

Home Properties (NYSE: HME) shares currently have a dividend yield of 4.20%.

Home Properties, Inc. is an independent real estate investment trust. The firm invests in the real estate markets of the United States. It is engaged in the ownership, management, acquisition, rehabilitation and development of residential apartment communities. The company has a P/E ratio of 32.24.

The average volume for Home Properties has been 897,000 shares per day over the past 30 days. Home Properties has a market cap of $4.2 billion and is part of the real estate industry. Shares are up 12% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Home Properties as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, revenue growth, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 25.3% when compared to the same quarter one year prior, rising from $45.79 million to $57.36 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 6.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has increased to $89.97 million or 14.63% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.20%.

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Omega Healthcare Investors

Dividend Yield: 6.00%

Omega Healthcare Investors (NYSE: OHI) shares currently have a dividend yield of 6.00%.

Omega Healthcare Investors, Inc. is a real estate investment firm. The firm invests in the real estate markets of United States. It invests in healthcare facilities, primarily in long-term healthcare facilities in order to create its portfolio. Omega Healthcare Investors, Inc. The company has a P/E ratio of 22.63.

The average volume for Omega Healthcare Investors has been 1,668,300 shares per day over the past 30 days. Omega Healthcare Investors has a market cap of $6.7 billion and is part of the real estate industry. Shares are down 6.7% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Omega Healthcare Investors as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • OHI's revenue growth has slightly outpaced the industry average of 8.9%. Since the same quarter one year prior, revenues rose by 10.4%. 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.
  • Net operating cash flow has increased to $103.29 million or 32.33% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.20%.
  • The gross profit margin for OMEGA HEALTHCARE INVS INC is rather high; currently it is at 64.47%. Regardless of OHI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OHI's net profit margin of 32.22% compares favorably to the industry average.
  • OMEGA HEALTHCARE INVS INC's earnings per share declined by 28.9% 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, OMEGA HEALTHCARE INVS INC increased its bottom line by earning $1.74 versus $1.46 in the prior year. For the next year, the market is expecting a contraction of 10.3% in earnings ($1.56 versus $1.74).
  • 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, OMEGA HEALTHCARE INVS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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