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."

EPR Properties

Dividend Yield: 6.40%

EPR Properties (NYSE: EPR) shares currently have a dividend yield of 6.40%.

EPR Properties is a real estate investment trust. It invests in the real estate markets of United States and Canada. The firm develops, owns, leases and finances properties in select market segments primarily related to entertainment, education and recreation. The company has a P/E ratio of 19.02.

The average volume for EPR Properties has been 328,600 shares per day over the past 30 days. EPR Properties has a market cap of $3.4 billion and is part of the real estate industry. Shares are down 1.2% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates EPR Properties as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, expanding profit margins and growth in earnings per share. 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:
  • EPR's revenue growth has slightly outpaced the industry average of 6.1%. Since the same quarter one year prior, revenues slightly increased by 9.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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 17.5% when compared to the same quarter one year prior, going from $42.71 million to $50.20 million.
  • Net operating cash flow has increased to $64.42 million or 19.61% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 9.39%.
  • The gross profit margin for EPR PROPERTIES is currently very high, coming in at 73.12%. Regardless of EPR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EPR's net profit margin of 46.18% significantly outperformed against the industry.
  • EPR PROPERTIES has improved earnings per share by 11.8% 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, EPR PROPERTIES reported lower earnings of $2.78 versus $3.13 in the prior year. This year, the market expects an improvement in earnings ($2.91 versus $2.78).

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Meredith

Dividend Yield: 4.50%

Meredith (NYSE: MDP) shares currently have a dividend yield of 4.50%.

Meredith Corporation operates as a diversified media company that focuses primarily on the home and family marketplace in the United States. It operates in two segments, Local Media and National Media. The company has a P/E ratio of 15.46.

The average volume for Meredith has been 335,700 shares per day over the past 30 days. Meredith has a market cap of $1.5 billion and is part of the media industry. Shares are down 21.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Meredith as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.0%. Since the same quarter one year prior, revenues slightly increased by 3.6%. 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 debt-to-equity ratio is somewhat low, currently at 0.87, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that MDP's debt-to-equity ratio is low, the quick ratio, which is currently 0.57, displays a potential problem in covering short-term cash needs.
  • MEREDITH CORP 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. 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, MEREDITH CORP increased its bottom line by earning $3.02 versus $2.50 in the prior year. This year, the market expects an improvement in earnings ($3.11 versus $3.02).
  • The gross profit margin for MEREDITH CORP is rather high; currently it is at 60.18%. Regardless of MDP'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 2.86% trails the industry average.

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Southern

Dividend Yield: 4.80%

Southern (NYSE: SO) shares currently have a dividend yield of 4.80%.

The Southern Company, together with its subsidiaries, operates as a public electric utility company. The company has a P/E ratio of 17.40.

The average volume for Southern has been 4,427,300 shares per day over the past 30 days. Southern has a market cap of $41.3 billion and is part of the utilities industry. Shares are down 5.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Southern 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, expanding profit margins 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:
  • SO's revenue growth has slightly outpaced the industry average of 0.8%. Since the same quarter one year prior, revenues slightly increased by 1.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SOUTHERN CO has improved earnings per share by 31.3% 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 year. We feel that this trend should continue. During the past fiscal year, SOUTHERN CO increased its bottom line by earning $2.18 versus $1.87 in the prior year. This year, the market expects an improvement in earnings ($2.87 versus $2.18).
  • 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 Electric Utilities industry average. The net income increased by 31.8% when compared to the same quarter one year prior, rising from $735.00 million to $969.00 million.
  • 43.29% is the gross profit margin for SOUTHERN CO which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.94% is above that of the industry average.
  • Net operating cash flow has increased to $2,981.00 million or 13.90% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.74%.

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