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."

Rayonier

Dividend Yield: 4.60%

Rayonier (NYSE: RYN) shares currently have a dividend yield of 4.60%.

Rayonier Inc. operates as an investment arm of Rayonier TRS Operating Company. Rayonier, Inc. engages in the sale and development of real estate and timberland management, as well as in the production and sale of cellulose fibers in the United States, New Zealand, and Australia. The company has a P/E ratio of 48.82.

The average volume for Rayonier has been 1,139,300 shares per day over the past 30 days. Rayonier has a market cap of $2.8 billion and is part of the materials & construction industry. Shares are down 19.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Rayonier as a hold. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • The revenue fell significantly faster than the industry average of 9.7%. Since the same quarter one year prior, revenues fell by 29.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing 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, RAYONIER INC's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for RAYONIER INC is currently lower than what is desirable, coming in at 31.05%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -1.32% is significantly below that of the industry average.
  • RAYONIER INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, RAYONIER INC reported lower earnings of $0.43 versus $0.80 in the prior year. For the next year, the market is expecting a contraction of 18.6% in earnings ($0.35 versus $0.43).
  • 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 109.4% when compared to the same quarter one year ago, falling from $16.35 million to -$1.54 million.

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Cypress Semiconductor

Dividend Yield: 4.90%

Cypress Semiconductor (NASDAQ: CY) shares currently have a dividend yield of 4.90%.

Cypress Semiconductor Corporation provides mixed-signal programmable solutions, semiconductor memories, and integrated semiconductor solutions worldwide.

The average volume for Cypress Semiconductor has been 7,827,500 shares per day over the past 30 days. Cypress Semiconductor has a market cap of $3.0 billion and is part of the electronics industry. Shares are down 34.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Cypress Semiconductor as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • CY's very impressive revenue growth greatly exceeded the industry average of 10.5%. Since the same quarter one year prior, revenues leaped by 164.0%. 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.
  • CY's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that CY's debt-to-equity ratio is low, the quick ratio, which is currently 0.66, displays a potential problem in covering short-term cash needs.
  • Net operating cash flow has significantly decreased to -$65.31 million or 247.39% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 1045.2% when compared to the same quarter one year ago, falling from $9.53 million to -$90.05 million.

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Royal Dutch Shell

Dividend Yield: 7.50%

Royal Dutch Shell (NYSE: RDS.B) shares currently have a dividend yield of 7.50%.

Royal Dutch Shell plc operates as an independent oil and gas company worldwide. It operates through Upstream and Downstream segments. The company explores for and extracts crude oil, natural gas, and natural gas liquids. The company has a P/E ratio of 6.31.

The average volume for Royal Dutch Shell has been 1,368,400 shares per day over the past 30 days. Royal Dutch Shell has a market cap of $159.4 billion and is part of the energy industry. Shares are down 28.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Royal Dutch Shell as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • RDS.B's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • RDS.B, with its decline in revenue, slightly underperformed the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 34.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $6,050.00 million or 29.98% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ROYAL DUTCH SHELL PLC has marginally lower results.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ROYAL DUTCH SHELL PLC'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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