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."

Welltower

Dividend Yield: 5.10%

Welltower (NYSE: HCN) shares currently have a dividend yield of 5.10%.

Welltower 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 25.20.

The average volume for Welltower has been 2,374,800 shares per day over the past 30 days. Welltower has a market cap of $22.9 billion and is part of the real estate industry. Shares are down 14.2% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Welltower 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 has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • HCN's revenue growth has slightly outpaced the industry average of 6.2%. Since the same quarter one year prior, revenues rose by 15.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • WELLTOWER INC has improved earnings per share by 18.2% 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, WELLTOWER 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 ($2.40 versus $1.40).
  • 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 Real Estate Investment Trusts (REITs) industry average. The net income increased by 30.0% when compared to the same quarter one year prior, rising from $152.61 million to $198.40 million.
  • Net operating cash flow has significantly increased by 61.22% to $416.98 million when compared to the same quarter last year. In addition, WELLTOWER INC has also vastly surpassed the industry average cash flow growth rate of -71.26%.

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Crown Castle International

Dividend Yield: 4.10%

Crown Castle International (NYSE: CCI) shares currently have a dividend yield of 4.10%.

Crown Castle International Corp., together with its subsidiaries, owns, operates, and leases shared wireless infrastructure in the United States and Australia. The company has a P/E ratio of 56.71.

The average volume for Crown Castle International has been 2,277,800 shares per day over the past 30 days. Crown Castle International has a market cap of $29.2 billion and is part of the telecommunications industry. Shares are up 10% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Crown Castle International as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, expanding profit margins, increase in stock price during the past year and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • CROWN CASTLE INTL CORP has improved earnings per share by 7.7% 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, CROWN CASTLE INTL CORP increased its bottom line by earning $0.96 versus $0.28 in the prior year. This year, the market expects an improvement in earnings ($4.35 versus $0.96).
  • 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 2.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for CROWN CASTLE INTL CORP is rather high; currently it is at 63.64%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CCI's net profit margin of 11.30% significantly trails the industry average.
  • After a year of stock price fluctuations, the net result is that CCI'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. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, CROWN CASTLE INTL CORP's return on equity is below that of both the industry average and the S&P 500.

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Omega Healthcare Investors

Dividend Yield: 6.50%

Omega Healthcare Investors (NYSE: OHI) shares currently have a dividend yield of 6.50%.

Omega Healthcare Investors, Inc. is a real estate investment firm. The firm invests in the real estate markets of United States. It invests in healthcare facilities, primarily in long-term healthcare facilities in order to create its portfolio. Omega Healthcare Investors, Inc. The company has a P/E ratio of 24.52.

The average volume for Omega Healthcare Investors has been 1,381,000 shares per day over the past 30 days. Omega Healthcare Investors has a market cap of $6.4 billion and is part of the real estate industry. Shares are down 11.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Omega Healthcare Investors as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • OHI's very impressive revenue growth greatly exceeded the industry average of 6.3%. Since the same quarter one year prior, revenues leaped by 54.6%. 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, 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 Real Estate Investment Trusts (REITs) industry average. The net income increased by 28.7% when compared to the same quarter one year prior, rising from $61.71 million to $79.40 million.
  • The gross profit margin for OMEGA HEALTHCARE INVS INC is rather high; currently it is at 69.21%. Regardless of OHI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OHI's net profit margin of 39.31% significantly outperformed against the industry.
  • OMEGA HEALTHCARE INVS INC's earnings per share declined by 10.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, OMEGA HEALTHCARE INVS INC increased its bottom line by earning $1.74 versus $1.46 in the prior year. For the next year, the market is expecting a contraction of 21.3% in earnings ($1.37 versus $1.74).
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, OHI has underperformed the S&P 500 Index, declining 8.21% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

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