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."

Tesoro Logistics

Dividend Yield: 6.40%

Tesoro Logistics (NYSE: TLLP) shares currently have a dividend yield of 6.40%.

Tesoro Logistics LP owns, operates, develops, and acquires logistics assets related to crude oil and refined products in the United States. It operates in three segments: Gathering, Processing, and Terminalling and Transportation. The company has a P/E ratio of 35.91.

The average volume for Tesoro Logistics has been 395,000 shares per day over the past 30 days. Tesoro Logistics has a market cap of $4.2 billion and is part of the energy industry. Shares are down 6.9% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Tesoro Logistics as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • TLLP's very impressive revenue growth greatly exceeded the industry average of 36.9%. Since the same quarter one year prior, revenues leaped by 87.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 128.4% when compared to the same quarter one year prior, rising from $32.40 million to $74.00 million.
  • TESORO LOGISTICS LP reported significant earnings per share improvement 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, TESORO LOGISTICS LP reported lower earnings of $1.42 versus $1.45 in the prior year. This year, the market expects an improvement in earnings ($2.54 versus $1.42).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, TESORO LOGISTICS LP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The debt-to-equity ratio of 1.36 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, TLLP maintains a poor quick ratio of 0.84, which illustrates the inability to avoid short-term cash problems.

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Canon

Dividend Yield: 4.40%

Canon (NYSE: CAJ) shares currently have a dividend yield of 4.40%.

Canon Inc. manufactures and sells office multifunction devices (MFDs), plain paper copying machines, laser printers, inkjet printers, cameras, and lithography equipment. The company has a P/E ratio of 11.44.

The average volume for Canon has been 293,600 shares per day over the past 30 days. Canon has a market cap of $30.6 billion and is part of the consumer durables industry. Shares are down 6.1% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Canon 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 a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 25.6%. Since the same quarter one year prior, revenues rose by 21.4%. 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.
  • CAJ's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The gross profit margin for CANON INC is rather high; currently it is at 58.21%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CAJ's net profit margin of 5.32% significantly trails the industry average.
  • 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 Computers & Peripherals industry and the overall market, CANON INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • CAJ is off 10.85% from its price level of one year ago, reflecting a combination of (a) the general market trend and (b) the company's own weaknesses, including its lower earnings per share compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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National Oilwell Varco

Dividend Yield: 6.10%

National Oilwell Varco (NYSE: NOV) shares currently have a dividend yield of 6.10%.

National Oilwell Varco, Inc. designs, manufactures, and sells equipment and components used in oil and gas drilling, completion, and production; and provides oilfield services to the upstream oil and gas industry worldwide. The company has a P/E ratio of 9.05.

The average volume for National Oilwell Varco has been 5,190,200 shares per day over the past 30 days. National Oilwell Varco has a market cap of $11.2 billion and is part of the energy industry. Shares are down 10.6% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates National Oilwell Varco as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • NOV's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 1.00 is somewhat weak and could be cause for future problems.
  • NOV, with its decline in revenue, slightly underperformed the industry average of 31.1%. Since the same quarter one year prior, revenues fell by 40.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $410.00 million or 21.00% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, NATIONAL OILWELL VARCO INC has marginally lower results.
  • 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 Energy Equipment & Services industry. The net income has significantly decreased by 77.8% when compared to the same quarter one year ago, falling from $699.00 million to $155.00 million.

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