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."

Valley National Bancorp

Dividend Yield: 4.50%

Valley National Bancorp (NYSE: VLY) shares currently have a dividend yield of 4.50%.

Valley National Bancorp operates as the holding company for the Valley National Bank that provides commercial, retail, insurance, and wealth management financial services products. The company operates through Commercial Lending, Consumer Lending, and Investment Management segments. The company has a P/E ratio of 18.98.

The average volume for Valley National Bancorp has been 1,569,900 shares per day over the past 30 days. Valley National Bancorp has a market cap of $2.3 billion and is part of the banking industry. Shares are down 0.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Valley National Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, expanding profit margins and reasonable valuation levels. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 15.5%. 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.
  • 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 Commercial Banks industry average. The net income increased by 8.4% when compared to the same quarter one year prior, going from $29.52 million to $31.99 million.
  • The gross profit margin for VALLEY NATIONAL BANCORP is currently very high, coming in at 77.51%. Regardless of VLY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 16.32% trails the industry average.
  • After a year of stock price fluctuations, the net result is that VLY's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.

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Medical Properties

Dividend Yield: 7.60%

Medical Properties (NYSE: MPW) shares currently have a dividend yield of 7.60%.

Medical Properties Trust, Inc. operates as a real estate investment trust (REIT) in the United States. It acquires, develops, and invests in healthcare facilities; and leases healthcare facilities to healthcare operating companies and healthcare providers. The company has a P/E ratio of 21.06.

The average volume for Medical Properties has been 3,135,700 shares per day over the past 30 days. Medical Properties has a market cap of $2.4 billion and is part of the real estate industry. Shares are down 19.4% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Medical Properties as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, compelling growth in net income, 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 revenue growth came in higher than the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 31.6%. Growth in the company's revenue appears to have helped boost the 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 11137.9% when compared to the same quarter one year prior, rising from -$0.20 million to $22.41 million.
  • Net operating cash flow has increased to $45.42 million or 42.05% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 16.13%.
  • 48.91% is the gross profit margin for MEDICAL PROPERTIES TRUST which we consider to be strong. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, MPW's net profit margin of 22.04% significantly trails the industry average.

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Macquarie Infrastructure

Dividend Yield: 5.80%

Macquarie Infrastructure (NYSE: MIC) shares currently have a dividend yield of 5.80%.

Macquarie Infrastructure Company LLC, through its subsidiaries, owns, operates, and invests in infrastructure businesses that provide services to businesses and individuals primarily in the United States. The company has a P/E ratio of 5.45.

The average volume for Macquarie Infrastructure has been 632,000 shares per day over the past 30 days. Macquarie Infrastructure has a market cap of $6.1 billion and is part of the transportation industry. Shares are up 2.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Macquarie Infrastructure as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, reasonable valuation levels, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • MIC's very impressive revenue growth is slightly higher than the industry average of 45.6%. Since the same quarter one year prior, revenues leaped by 50.8%. 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.
  • 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. When compared to other companies in the Transportation Infrastructure industry and the overall market, MACQUARIE INFRASTRUCTURE CP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for MACQUARIE INFRASTRUCTURE CP is rather high; currently it is at 54.29%. 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 -14.89% is in-line with the industry average.
  • Net operating cash flow has slightly increased to $76.93 million or 6.46% when compared to the same quarter last year. Despite an increase in cash flow, MACQUARIE INFRASTRUCTURE CP's cash flow growth rate is still lower than the industry average growth rate of 30.49%.

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