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."

Lamar Advertising

Dividend Yield: 5.20%

Lamar Advertising (NASDAQ: LAMR) shares currently have a dividend yield of 5.20%.

Lamar Advertising Company is a publicly owned equity real estate investment trust. The firm primarily engages in selling advertising space on billboards, buses, shelters, benches, and logo plates. Lamar Advertising Company was founded in 1902 and is headquartered in Baton Rouge, Louisiana. The company has a P/E ratio of 14.65.

The average volume for Lamar Advertising has been 641,400 shares per day over the past 30 days. Lamar Advertising has a market cap of $4.3 billion and is part of the real estate industry. Shares are down 1% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Lamar Advertising as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, notable return on equity, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • 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 284.9% when compared to the same quarter one year prior, rising from $15.42 million to $59.36 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.7%. Since the same quarter one year prior, revenues slightly increased by 4.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, LAMAR ADVERTISING CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $133.49 million or 20.42% when compared to the same quarter last year. In addition, LAMAR ADVERTISING CO has also modestly surpassed the industry average cash flow growth rate of 16.09%.
  • The gross profit margin for LAMAR ADVERTISING CO is rather high; currently it is at 66.66%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, LAMR's net profit margin of 17.24% significantly trails the industry average.

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Hawaiian Electric Industries

Dividend Yield: 4.50%

Hawaiian Electric Industries (NYSE: HE) shares currently have a dividend yield of 4.50%.

Hawaiian Electric Industries, Inc., through its subsidiaries, engages in the electric utility and banking businesses primarily in the State of Hawaii. The company is involved in the production, purchase, transmission, distribution, and sale of electricity. The company has a P/E ratio of 19.36.

The average volume for Hawaiian Electric Industries has been 357,000 shares per day over the past 30 days. Hawaiian Electric Industries has a market cap of $3.0 billion and is part of the utilities industry. Shares are down 17.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Hawaiian Electric Industries as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • HAWAIIAN ELECTRIC INDS's earnings per share declined by 19.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HAWAIIAN ELECTRIC INDS increased its bottom line by earning $1.64 versus $1.62 in the prior year. This year, the market expects an improvement in earnings ($1.67 versus $1.64).
  • Net operating cash flow has slightly increased to $27.65 million or 3.28% when compared to the same quarter last year. Despite an increase in cash flow, HAWAIIAN ELECTRIC INDS's cash flow growth rate is still lower than the industry average growth rate of 21.64%.
  • HE, with its decline in revenue, underperformed when compared the industry average of 0.8%. Since the same quarter one year prior, revenues fell by 21.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Even though the current debt-to-equity ratio is 1.01, it is still below the industry average, suggesting that this level of debt is acceptable within the Electric Utilities industry.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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Health Care REIT

Dividend Yield: 5.30%

Health Care REIT (NYSE: HCN) shares currently have a dividend yield of 5.30%.

Health Care REIT, Inc. is an independent equity real estate investment trust. The firm engages in acquiring, planning, developing, managing, repositioning and monetizing of real estate assets. It primarily invests in the real estate markets of the United States. The company has a P/E ratio of 24.64.

The average volume for Health Care REIT has been 2,389,800 shares per day over the past 30 days. Health Care REIT has a market cap of $21.8 billion and is part of the real estate industry. Shares are down 17% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Health Care REIT as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • HCN's revenue growth has slightly outpaced the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 17.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • HEALTH CARE REIT 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 two years. We feel that this trend should continue. During the past fiscal year, HEALTH CARE REIT INC increased its bottom line by earning $1.40 versus $0.09 in the prior year. This year, the market expects an improvement in earnings ($2.41 versus $1.40).
  • 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 273.0% when compared to the same quarter one year prior, rising from $88.18 million to $328.93 million.
  • Net operating cash flow has increased to $393.16 million or 16.70% when compared to the same quarter last year. In addition, HEALTH CARE REIT INC has also modestly surpassed the industry average cash flow growth rate of 16.09%.

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