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: 4.30%

Rayonier (NYSE: RYN) shares currently have a dividend yield of 4.30%.

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 51.16.

The average volume for Rayonier has been 1,198,300 shares per day over the past 30 days. Rayonier has a market cap of $2.9 billion and is part of the materials & construction industry. Shares are down 16.3% year-to-date as of the close of trading on Tuesday.

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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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Stag Industrial

Dividend Yield: 8.10%

Stag Industrial (NYSE: STAG) shares currently have a dividend yield of 8.10%.

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 654,400 shares per day over the past 30 days. Stag Industrial has a market cap of $1.2 billion and is part of the real estate industry. Shares are down 30.4% year-to-date as of the close of trading on Tuesday.

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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 9.7%. Since the same quarter one year prior, revenues rose by 26.8%. 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 $32.13 million or 22.23% when compared to the same quarter last year. In addition, STAG INDUSTRIAL INC has also modestly surpassed the industry average cash flow growth rate of 15.97%.
  • 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 (-$0.25 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 7.01%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -9.14% is significantly below that of the industry average.

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BioMed Realty

Dividend Yield: 5.70%

BioMed Realty (NYSE: BMR) shares currently have a dividend yield of 5.70%.

BioMed Realty Trust, Inc. operates as a real estate investment trust (REIT) that focuses on providing real estate to the life science industry in the United States. The company has a P/E ratio of 18.11.

The average volume for BioMed Realty has been 1,573,400 shares per day over the past 30 days. BioMed Realty has a market cap of $3.7 billion and is part of the real estate industry. Shares are down 14.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates BioMed Realty as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, reasonable valuation levels and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • 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 26.5% when compared to the same quarter one year prior, rising from $18.64 million to $23.58 million.
  • BMR, with its decline in revenue, underperformed when compared the industry average of 9.7%. Since the same quarter one year prior, revenues slightly dropped by 7.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • BMR has underperformed the S&P 500 Index, declining 18.01% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Net operating cash flow has decreased to $55.49 million or 23.60% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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