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."

Holly Energy Partners

Dividend Yield: 7.50%

Holly Energy Partners (NYSE: HEP) shares currently have a dividend yield of 7.50%.

Holly Energy Partners, L.P. owns and operates petroleum product and crude pipelines, storage tanks, distribution terminals, and loading rack facilities. The company has a P/E ratio of 20.86.

The average volume for Holly Energy Partners has been 115,500 shares per day over the past 30 days. Holly Energy Partners has a market cap of $1.7 billion and is part of the energy industry. Shares are down 3.3% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Holly Energy Partners as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, impressive record of earnings per share growth and compelling growth in net income. We feel its 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 greatly exceeded the industry average of 34.8%. Since the same quarter one year prior, revenues rose by 11.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HOLLY ENERGY PARTNERS LP has improved earnings per share by 36.0% 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, HOLLY ENERGY PARTNERS LP increased its bottom line by earning $1.20 versus $0.88 in the prior year. This year, the market expects an improvement in earnings ($1.53 versus $1.20).
  • 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 32.0% when compared to the same quarter one year prior, rising from $23.03 million to $30.40 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, HOLLY ENERGY PARTNERS LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for HOLLY ENERGY PARTNERS LP is rather high; currently it is at 69.71%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 36.41% significantly outperformed against the industry average.

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CorEnergy Infrastructure

Dividend Yield: 9.50%

CorEnergy Infrastructure (NYSE: CORR) shares currently have a dividend yield of 9.50%.

CorEnergy Infrastructure Trust, Inc. is an open-ended equity trust launched and managed by Corridor InfraTrust Management, LLC. The trust primarily owns midstream and downstream U.S. energy infrastructure assets subject to long-term triple net participating leases with energy companies. The company has a P/E ratio of 19.03.

The average volume for CorEnergy Infrastructure has been 677,500 shares per day over the past 30 days. CorEnergy Infrastructure has a market cap of $266.2 million and is part of the real estate industry. Shares are down 11.7% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates CorEnergy Infrastructure as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, reasonable valuation levels, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 7.1%. Since the same quarter one year prior, revenues rose by 45.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant 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 Real Estate Investment Trusts (REITs) industry. The net income increased by 94.2% when compared to the same quarter one year prior, rising from $2.11 million to $4.09 million.
  • 43.53% is the gross profit margin for CORENERGY INFRASTRUCTURE TR which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 28.03% trails the industry average.
  • CORENERGY INFRASTRUCTURE TR reported flat earnings per share in the most recent quarter. 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, CORENERGY INFRASTRUCTURE TR increased its bottom line by earning $0.23 versus $0.18 in the prior year. This year, the market expects earnings to be in line with last year ($0.23 versus $0.23).

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TC Pipelines

Dividend Yield: 7.10%

TC Pipelines (NYSE: TCP) shares currently have a dividend yield of 7.10%.

TC PipeLines, LP acquires, owns, and participates in the management of energy infrastructure businesses in North America. The company has a P/E ratio of 18.45.

The average volume for TC Pipelines has been 147,900 shares per day over the past 30 days. TC Pipelines has a market cap of $3.2 billion and is part of the energy industry. Shares are down 25.5% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates TC Pipelines as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, expanding profit margins and notable return on equity. We feel its 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 greatly exceeded the industry average of 34.8%. Since the same quarter one year prior, revenues slightly increased by 3.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • TC PIPELINES LP has improved earnings per share by 13.8% 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, TC PIPELINES LP increased its bottom line by earning $2.67 versus $2.13 in the prior year. This year, the market expects an improvement in earnings ($2.89 versus $2.67).
  • 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 18.9% when compared to the same quarter one year prior, going from $37.00 million to $44.00 million.
  • The gross profit margin for TC PIPELINES LP is currently very high, coming in at 78.82%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 51.76% significantly outperformed against the industry average.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TC PIPELINES LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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