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."

Northern Tier Energy

Dividend Yield: 19.50%

Northern Tier Energy (NYSE: NTI) shares currently have a dividend yield of 19.50%.

Northern Tier Energy LP, an independent downstream energy company, engages in refining, retail, and pipeline operations in the United States. It operates through two segments, Refining and Retail. The company has a P/E ratio of 6.44.

The average volume for Northern Tier Energy has been 648,800 shares per day over the past 30 days. Northern Tier Energy has a market cap of $2.3 billion and is part of the energy industry. Shares are up 10.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Northern Tier Energy as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, notable return on equity, attractive valuation levels and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • NORTHERN TIER ENERGY LP 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, NORTHERN TIER ENERGY LP increased its bottom line by earning $2.60 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($4.00 versus $2.60).
  • 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 122.6% when compared to the same quarter one year prior, rising from $57.90 million to $128.90 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, NORTHERN TIER ENERGY LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 91.56% to $120.30 million when compared to the same quarter last year. In addition, NORTHERN TIER ENERGY LP has also vastly surpassed the industry average cash flow growth rate of -19.88%.

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Health Care REIT

Dividend Yield: 4.90%

Health Care REIT (NYSE: HCN) shares currently have a dividend yield of 4.90%.

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 26.91.

The average volume for Health Care REIT has been 2,384,000 shares per day over the past 30 days. Health Care REIT has a market cap of $23.8 billion and is part of the real estate industry. Shares are down 9.9% year-to-date as of the close of trading on Wednesday.

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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 shows low profit margins.

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 16.11%.

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Old Republic International Corporation

Dividend Yield: 4.70%

Old Republic International Corporation (NYSE: ORI) shares currently have a dividend yield of 4.70%.

Old Republic International Corporation, through its subsidiaries, engages in the insurance underwriting and related services business primarily in the United States and Canada. The company has a P/E ratio of 12.64.

The average volume for Old Republic International Corporation has been 1,154,100 shares per day over the past 30 days. Old Republic International Corporation has a market cap of $4.1 billion and is part of the insurance industry. Shares are up 7.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Old Republic International Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and increase in net income. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 5.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although ORI's debt-to-equity ratio of 0.24 is very low, it is currently higher than that of the industry average.
  • 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. Although other factors naturally played a role, the company's strong earnings growth was key. 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 significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 54.5% when compared to the same quarter one year prior, rising from $66.10 million to $102.10 million.
  • Net operating cash flow has significantly increased by 204.86% to $112.80 million when compared to the same quarter last year. In addition, OLD REPUBLIC INTL CORP has also vastly surpassed the industry average cash flow growth rate of -46.37%.

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