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."

National Retail Properties

Dividend Yield: 4.50%

National Retail Properties (NYSE: NNN) shares currently have a dividend yield of 4.50%.

National Retail Properties, Inc. is a publicly owned equity real estate investment trust. The firm acquires, owns, manages, and develops retail properties in the United States. The company has a P/E ratio of 29.52.

The average volume for National Retail Properties has been 1,173,000 shares per day over the past 30 days. National Retail Properties has a market cap of $5.3 billion and is part of the real estate industry. Shares are down 2.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates National Retail Properties as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, compelling growth in net income, expanding profit margins and good cash flow from operations. 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:
  • NNN's revenue growth has slightly outpaced the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 12.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • NATIONAL RETAIL PROPERTIES has improved earnings per share by 9.7% 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, NATIONAL RETAIL PROPERTIES increased its bottom line by earning $1.24 versus $1.06 in the prior year. This year, the market expects an improvement in earnings ($1.28 versus $1.24).
  • 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 15.1% when compared to the same quarter one year prior, going from $47.94 million to $55.20 million.
  • The gross profit margin for NATIONAL RETAIL PROPERTIES is rather high; currently it is at 68.79%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 44.81% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $110.15 million or 16.27% when compared to the same quarter last year. In addition, NATIONAL RETAIL PROPERTIES has also modestly surpassed the industry average cash flow growth rate of 9.41%.

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PacWest Bancorp

Dividend Yield: 4.30%

PacWest Bancorp (NASDAQ: PACW) shares currently have a dividend yield of 4.30%.

PacWest Bancorp operates as the holding company for Pacific Western Bank that provides commercial banking products and services to individuals, professionals, and small to mid-sized businesses in the United States. It accepts demand, money market, and time deposits. The company has a P/E ratio of 15.63.

The average volume for PacWest Bancorp has been 765,700 shares per day over the past 30 days. PacWest Bancorp has a market cap of $5.5 billion and is part of the banking industry. Shares are down 0.7% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates PacWest Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • PACW's revenue growth has slightly outpaced the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 2.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PACWEST BANCORP has improved earnings per share by 13.3% 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, PACWEST BANCORP increased its bottom line by earning $1.97 versus $1.08 in the prior year. This year, the market expects an improvement in earnings ($2.87 versus $1.97).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Commercial Banks industry average. The net income increased by 11.8% when compared to the same quarter one year prior, going from $62.27 million to $69.62 million.
  • Net operating cash flow has increased to $124.28 million or 28.59% when compared to the same quarter last year. Despite an increase in cash flow of 28.59%, PACWEST BANCORP is still growing at a significantly lower rate than the industry average of 310.31%.
  • The gross profit margin for PACWEST BANCORP is currently very high, coming in at 89.30%. Regardless of PACW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PACW's net profit margin of 31.15% compares favorably to the industry average.

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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 56.13.

The average volume for Crown Castle International has been 2,027,300 shares per day over the past 30 days. Crown Castle International has a market cap of $28.9 billion and is part of the telecommunications industry. Shares are up 9.2% year-to-date as of the close of trading on Tuesday.

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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, solid stock price performance 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:
  • 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 6.1%. 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.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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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