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 "Hold."

Greenhill

Dividend Yield: 6.70%

Greenhill (NYSE: GHL) shares currently have a dividend yield of 6.70%.

Greenhill & Co., Inc., together with its subsidiaries, operates as an independent investment bank for corporations, partnerships, institutions, and governments worldwide. The company has a P/E ratio of 25.19.

The average volume for Greenhill has been 376,200 shares per day over the past 30 days. Greenhill has a market cap of $790.2 million and is part of the financial services industry. Shares are down 37% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Greenhill as a hold. The company's strongest point has been its expanding profit margins. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • The revenue fell significantly faster than the industry average of 4.7%. Since the same quarter one year prior, revenues fell by 45.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for GREENHILL & CO INC is currently extremely low, coming in at 5.34%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 1.35% significantly trails the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 44.15%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 96.96% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, GHL is still more expensive than most of the other companies in its industry.
  • GREENHILL & CO INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, GREENHILL & CO INC reported lower earnings of $1.45 versus $1.56 in the prior year. For the next year, the market is expecting a contraction of 40.0% in earnings ($0.87 versus $1.45).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 96.5% when compared to the same quarter one year ago, falling from $19.87 million to $0.68 million.

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DDR

Dividend Yield: 4.10%

DDR (NYSE: DDR) shares currently have a dividend yield of 4.10%.

DDR Corp. is an equity real estate investment trust. It invests in the real estate markets of the United States and Puerto Rico. The firm is in the business of acquiring, owning, developing, redeveloping, expanding, leasing and managing shopping centers.

The average volume for DDR has been 3,954,100 shares per day over the past 30 days. DDR has a market cap of $6.1 billion and is part of the real estate industry. Shares are down 7.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates DDR as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.2%. Since the same quarter one year prior, revenues slightly increased by 5.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 35.49% is the gross profit margin for DDR CORP 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 22.46% trails the industry average.
  • DDR CORP 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, DDR CORP continued to lose money by earning -$0.01 versus -$0.05 in the prior year. For the next year, the market is expecting a contraction of 5690.0% in earnings (-$0.58 versus -$0.01).
  • The company, on the basis of change in net income 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 has decreased by 13.2% when compared to the same quarter one year ago, dropping from $68.61 million to $59.56 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, DDR CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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HCP

Dividend Yield: 6.30%

HCP (NYSE: HCP) shares currently have a dividend yield of 6.30%.

HCP, Inc. is an independent hybrid real estate investment trust. The fund invests in real estate markets of the United States. The company has a P/E ratio of 72.24.

The average volume for HCP has been 3,653,900 shares per day over the past 30 days. HCP has a market cap of $16.8 billion and is part of the real estate industry. Shares are down 18.7% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates HCP as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • HCP's revenue growth has slightly outpaced the industry average of 6.2%. Since the same quarter one year prior, revenues slightly increased by 9.8%. 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 gross profit margin for HCP INC is rather high; currently it is at 53.74%. Regardless of HCP'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 17.31% trails the industry average.
  • Net operating cash flow has declined marginally to $273.67 million or 0.59% when compared to the same quarter last year. Despite a decrease in cash flow of 0.59%, HCP INC is still significantly exceeding the industry average of -63.68%.
  • HCP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, HCP INC reported lower earnings of $1.95 versus $1.97 in the prior year. For the next year, the market is expecting a contraction of 56.9% in earnings ($0.84 versus $1.95).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 53.4% when compared to the same quarter one year ago, falling from $247.65 million to $115.36 million.

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