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."

Siliconware Precision Industries

Dividend Yield: 7.40%

Siliconware Precision Industries (NASDAQ: SPIL) shares currently have a dividend yield of 7.40%.

Siliconware Precision Industries Co., Ltd. provides semiconductor packaging and testing services to semiconductor suppliers worldwide. The company has a P/E ratio of 20.06.

The average volume for Siliconware Precision Industries has been 1,207,700 shares per day over the past 30 days. Siliconware Precision Industries has a market cap of $3.9 billion and is part of the electronics industry. Shares are down 15.6% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Siliconware Precision Industries as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Semiconductors & Semiconductor Equipment industry average. The net income increased by 5.0% when compared to the same quarter one year prior, going from $114.31 million to $120.07 million.
  • The current debt-to-equity ratio, 0.40, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.21, which illustrates the ability to avoid short-term cash problems.
  • 42.45% is the gross profit margin for SILICONWARE PRECISION INDS which we consider to be strong. 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 17.26% trails the industry average.
  • 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. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, SILICONWARE PRECISION INDS has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

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Sabra Health Care REIT

Dividend Yield: 7.10%

Sabra Health Care REIT (NASDAQ: SBRA) shares currently have a dividend yield of 7.10%.

Sabra Health Care REIT, Inc. operates as a real estate investment trust in the United States. The company, through its subsidiaries, owns and invests in real estate properties for the healthcare industry. The company has a P/E ratio of 18.72.

The average volume for Sabra Health Care REIT has been 377,700 shares per day over the past 30 days. Sabra Health Care REIT has a market cap of $1.5 billion and is part of the real estate industry. Shares are down 24.3% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Sabra Health Care REIT as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, expanding profit margins, increase in net income and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.8%. Since the same quarter one year prior, revenues rose by 31.7%. 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.
  • SABRA HEALTH CARE REIT INC's earnings per share declined by 14.3% 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, SABRA HEALTH CARE REIT INC increased its bottom line by earning $0.69 versus $0.67 in the prior year. This year, the market expects an improvement in earnings ($1.17 versus $0.69).
  • The gross profit margin for SABRA HEALTH CARE REIT INC is rather high; currently it is at 51.70%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 29.75% trails the industry average.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Real Estate Investment Trusts (REITs) industry average, but is greater than that of the S&P 500. The net income increased by 13.7% when compared to the same quarter one year prior, going from $14.80 million to $16.84 million.

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Newtek Business Services

Dividend Yield: 11.80%

Newtek Business Services (NASDAQ: NEWT) shares currently have a dividend yield of 11.80%.

Newtek Business Services Corp., a business development company, provides financial and business services to the small-and medium-sized business market in the United States and internationally. The company has a P/E ratio of 187.78.

The average volume for Newtek Business Services has been 99,800 shares per day over the past 30 days. Newtek Business Services has a market cap of $175.0 million and is part of the diversified services industry. Shares are up 15% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Newtek Business Services as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, attractive valuation levels, good cash flow from operations and impressive record of earnings per share growth. 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:
  • Powered by its strong earnings growth of 140.00% and other important driving factors, this stock has surged by 28.43% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NEWT should continue to move higher despite the fact that it has already enjoyed a very nice gain 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 Capital Markets industry. The net income increased by 249.8% when compared to the same quarter one year prior, rising from $1.39 million to $4.88 million.
  • Net operating cash flow has significantly increased by 293.44% to $13.87 million when compared to the same quarter last year. In addition, NEWTEK BUSINESS SERVICES CP has also vastly surpassed the industry average cash flow growth rate of -410.93%.
  • NEWTEK BUSINESS SERVICES CP reported significant earnings per share improvement 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, NEWTEK BUSINESS SERVICES CP reported lower earnings of $0.59 versus $1.00 in the prior year. This year, the market expects an improvement in earnings ($1.95 versus $0.59).

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