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."

Rayonier

Dividend Yield: 4.20%

Rayonier (NYSE: RYN) shares currently have a dividend yield of 4.20%.

Rayonier Inc. operates as an investment arm of Rayonier TRS Operating Company. Rayonier, Inc. engages in the sale and development of real estate and timberland management, as well as in the production and sale of cellulose fibers in the United States, New Zealand, and Australia. The company has a P/E ratio of 67.80.

The average volume for Rayonier has been 1,021,500 shares per day over the past 30 days. Rayonier has a market cap of $3.0 billion and is part of the materials & construction industry. Shares are down 15.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Rayonier as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations 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:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.0%. Since the same quarter one year prior, revenues slightly increased by 1.2%. 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.
  • Net operating cash flow has slightly increased to $57.52 million or 5.86% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.80%.
  • 44.63% is the gross profit margin for RAYONIER INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, RYN's net profit margin of 12.98% significantly trails the industry average.
  • RAYONIER INC's earnings per share declined by 36.0% in the most recent quarter compared to 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, RAYONIER INC reported lower earnings of $0.43 versus $0.80 in the prior year. For the next year, the market is expecting a contraction of 16.3% in earnings ($0.36 versus $0.43).
  • 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 39.8% when compared to the same quarter one year ago, falling from $32.70 million to $19.70 million.

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Guess

Dividend Yield: 4.20%

Guess (NYSE: GES) shares currently have a dividend yield of 4.20%.

Guess , Inc. designs, markets, distributes, and licenses lifestyle collections of contemporary apparel and accessories for men, women, and children that reflect the American lifestyle and European fashion sensibilities. The company has a P/E ratio of 18.76.

The average volume for Guess has been 1,144,100 shares per day over the past 30 days. Guess has a market cap of $1.8 billion and is part of the retail industry. Shares are up 1.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Guess as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • GES's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GES has a quick ratio of 2.10, which demonstrates the ability of the company to cover short-term liquidity needs.
  • After a year of stock price fluctuations, the net result is that GES'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 fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Specialty Retail industry average, but is greater than that of the S&P 500. The net income has decreased by 16.7% when compared to the same quarter one year ago, dropping from $21.95 million to $18.29 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Specialty Retail industry and the overall market, GUESS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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Enterprise Products Partners

Dividend Yield: 5.80%

Enterprise Products Partners (NYSE: EPD) shares currently have a dividend yield of 5.80%.

Enterprise Products Partners L.P. provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products in the United States and internationally. The company has a P/E ratio of 21.14.

The average volume for Enterprise Products Partners has been 4,731,400 shares per day over the past 30 days. Enterprise Products Partners has a market cap of $53.4 billion and is part of the energy industry. Shares are down 25.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Enterprise Products Partners as a hold. Among the primary strengths of the company is its reasonable valuation levels, considering its current price compared to earnings, book value and other measures. At the same time, however, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • EPD, with its decline in revenue, underperformed when compared the industry average of 37.2%. Since the same quarter one year prior, revenues fell by 48.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Looking at the price performance of EPD's shares over the past 12 months, there is not much good news to report: the stock is down 26.26%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ENTERPRISE PRODS PRTNRS -LP's return on equity is below that of both the industry average and the S&P 500.

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