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."

Spirit Realty Capital

Dividend Yield: 7.10%

Spirit Realty Capital (NYSE: SRC) shares currently have a dividend yield of 7.10%.

Spirit Realty Capital, Inc is a publicly traded real estate investment trust. The company has a P/E ratio of 30.06.

The average volume for Spirit Realty Capital has been 3,798,700 shares per day over the past 30 days. Spirit Realty Capital has a market cap of $4.4 billion and is part of the real estate industry. Shares are down 14.2% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Spirit Realty Capital as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • SRC's revenue growth has slightly outpaced the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 10.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SPIRIT REALTY CAPITAL INC 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SPIRIT REALTY CAPITAL INC continued to lose money by earning -$0.10 versus -$0.11 in the prior year. This year, the market expects an improvement in earnings ($0.30 versus -$0.10).
  • 45.48% is the gross profit margin for SPIRIT REALTY CAPITAL INC which we consider to be strong. Regardless of SRC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SRC's net profit margin of 10.19% is significantly lower than the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, SPIRIT REALTY CAPITAL INC's return on equity is below that of both the industry average and the S&P 500.
  • SRC has underperformed the S&P 500 Index, declining 13.36% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

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RR Donnelley & Sons

Dividend Yield: 7.00%

RR Donnelley & Sons (NASDAQ: RRD) shares currently have a dividend yield of 7.00%.

R.R. Donnelley & Sons Company provides integrated communications solutions to private and public sector clients in the United States and internationally. The company operates through Publishing and Retail Services, Variable Print, Strategic Services, and International segments. The company has a P/E ratio of 30.53.

The average volume for RR Donnelley & Sons has been 1,431,500 shares per day over the past 30 days. RR Donnelley & Sons has a market cap of $3.1 billion and is part of the diversified services industry. Shares are down 10% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates RR Donnelley & Sons as a hold. The company's strongest point has been its expanding profit margins. At the same time, however, we also find weaknesses including deteriorating net income, generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.7%. Since the same quarter one year prior, revenues slightly dropped by 4.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • DONNELLEY (R R) & SONS CO 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. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, DONNELLEY (R R) & SONS CO reported lower earnings of $0.58 versus $1.15 in the prior year. This year, the market expects an improvement in earnings ($1.49 versus $0.58).
  • The gross profit margin for DONNELLEY (R R) & SONS CO is rather low; currently it is at 22.16%. Regardless of RRD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.50% trails the industry average.
  • 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 Commercial Services & Supplies industry. The net income has significantly decreased by 77.0% when compared to the same quarter one year ago, falling from $62.20 million to $14.30 million.
  • The debt-to-equity ratio is very high at 5.67 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, RRD maintains a poor quick ratio of 0.95, which illustrates the inability to avoid short-term cash problems.

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MDU Resources Group

Dividend Yield: 4.50%

MDU Resources Group (NYSE: MDU) shares currently have a dividend yield of 4.50%.

MDU Resources Group, Inc. operates as a diversified natural resource company in the United States. The company's Electric segment generates, transmits, and distributes electricity in Montana, North Dakota, South Dakota, and Wyoming. The company has a P/E ratio of 11.89.

The average volume for MDU Resources Group has been 1,310,100 shares per day over the past 30 days. MDU Resources Group has a market cap of $3.3 billion and is part of the materials & construction industry. Shares are down 28% year-to-date as of the close of trading on Wednesday.

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

Highlights from the ratings report include:
  • MDU's revenue growth has slightly outpaced the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 5.5%. 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 0.97, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.81 is somewhat weak and could be cause for future problems.
  • 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 Multi-Utilities industry. The net income has significantly decreased by 235.1% when compared to the same quarter one year ago, falling from $103.21 million to -$139.45 million.
  • The gross profit margin for MDU RESOURCES GROUP INC is currently extremely low, coming in at 13.09%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -10.89% is significantly below that of the industry average.

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