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."

Ship Finance International

Dividend Yield: 10.70%

Ship Finance International (NYSE: SFL) shares currently have a dividend yield of 10.70%.

Ship Finance International Limited owns and operates vessels and offshore related assets in Bermuda, Cyprus, Malta, Liberia, Norway, Singapore, the United Kingdom, and the Marshall Islands. It is also involved in the charter, purchase, and sale of assets. The company has a P/E ratio of 16.56.

The average volume for Ship Finance International has been 624,700 shares per day over the past 30 days. Ship Finance International has a market cap of $1.5 billion and is part of the transportation industry. Shares are up 20.9% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Ship Finance International as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 34.6%. Since the same quarter one year prior, revenues rose by 26.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SHIP FINANCE INTL LTD 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 year. We feel that this trend should continue. During the past fiscal year, SHIP FINANCE INTL LTD increased its bottom line by earning $1.25 versus $1.01 in the prior year. This year, the market expects an improvement in earnings ($2.36 versus $1.25).
  • 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 203.9% when compared to the same quarter one year prior, rising from $22.36 million to $67.94 million.
  • The gross profit margin for SHIP FINANCE INTL LTD is currently very high, coming in at 71.74%. It has increased significantly from the same period last year. Along with this, the net profit margin of 73.83% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 90.03% to $38.04 million when compared to the same quarter last year. In addition, SHIP FINANCE INTL LTD has also vastly surpassed the industry average cash flow growth rate of -19.65%.

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DHT Holdings

Dividend Yield: 7.60%

DHT Holdings (NYSE: DHT) shares currently have a dividend yield of 7.60%.

DHT Holdings, Inc. operates crude oil tankers in Bermuda. As of March 10, 2015, its fleet consisted of 18 crude oil tankers, including 14 very large crude carriers, 2 Suezmax tankers, and 2 Aframax tankers. The company was incorporated in 2005 and is headquartered in Hamilton, Bermuda. The company has a P/E ratio of 14.91.

The average volume for DHT Holdings has been 1,537,100 shares per day over the past 30 days. DHT Holdings has a market cap of $733.5 million and is part of the transportation industry. Shares are up 14.1% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates DHT Holdings as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. 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:
  • DHT's very impressive revenue growth greatly exceeded the industry average of 34.6%. Since the same quarter one year prior, revenues leaped by 327.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • DHT HOLDINGS 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, DHT HOLDINGS INC turned its bottom line around by earning $0.08 versus -$0.52 in the prior year. This year, the market expects an improvement in earnings ($0.98 versus $0.08).
  • 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 375.4% when compared to the same quarter one year prior, rising from -$8.06 million to $22.19 million.
  • The gross profit margin for DHT HOLDINGS INC is rather high; currently it is at 65.22%. It has increased significantly from the same period last year. Along with this, the net profit margin of 26.77% significantly outperformed against the industry average.

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Meredith

Dividend Yield: 4.20%

Meredith (NYSE: MDP) shares currently have a dividend yield of 4.20%.

Meredith Corporation operates as a diversified media company that focuses primarily on the home and family marketplace in the United States. It operates in two segments, Local Media and National Media. The company has a P/E ratio of 14.40.

The average volume for Meredith has been 615,800 shares per day over the past 30 days. Meredith has a market cap of $1.6 billion and is part of the media industry. Shares are down 20.1% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Meredith as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, reasonable valuation levels, expanding profit margins and increase in net income. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • MDP's revenue growth has slightly outpaced the industry average of 6.4%. Since the same quarter one year prior, revenues slightly increased by 9.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MEREDITH CORP has improved earnings per share by 5.6% 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, MEREDITH CORP increased its bottom line by earning $3.02 versus $2.50 in the prior year. This year, the market expects an improvement in earnings ($3.08 versus $3.02).
  • The gross profit margin for MEREDITH CORP is rather high; currently it is at 61.89%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.99% trails the industry average.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Media industry average. The net income increased by 5.3% when compared to the same quarter one year prior, going from $40.45 million to $42.58 million.

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