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."

Apollo Commercial Real Estate Finance

Dividend Yield: 11.20%

Apollo Commercial Real Estate Finance (NYSE: ARI) shares currently have a dividend yield of 11.20%.

Apollo Commercial Real Estate Finance, Inc. The company has a P/E ratio of 9.59.

The average volume for Apollo Commercial Real Estate Finance has been 486,600 shares per day over the past 30 days. Apollo Commercial Real Estate Finance has a market cap of $1.1 billion and is part of the real estate industry. Shares are down 10.1% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Apollo Commercial Real Estate Finance as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels, expanding profit margins, good cash flow from operations and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 48.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • APOLLO COMMERCIAL RE FIN INC has improved earnings per share by 5.4% 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, APOLLO COMMERCIAL RE FIN INC increased its bottom line by earning $1.73 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus $1.73).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 34.9% when compared to the same quarter one year prior, rising from $19.16 million to $25.85 million.
  • The gross profit margin for APOLLO COMMERCIAL RE FIN INC is currently very high, coming in at 88.14%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 49.49% significantly outperformed against the industry average.

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National Health Investors

Dividend Yield: 5.70%

National Health Investors (NYSE: NHI) shares currently have a dividend yield of 5.70%.

National Health Investors Inc. is a real estate investment trust. It invests in the real estate markets of United States. The firm invests in the health care properties primarily in the long-term care and senior housing industries. The company has a P/E ratio of 17.88.

The average volume for National Health Investors has been 240,100 shares per day over the past 30 days. National Health Investors has a market cap of $2.2 billion and is part of the real estate industry. Shares are down 0.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates National Health Investors as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 30.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NATIONAL HEALTH INVESTORS has improved earnings per share by 17.1% 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 HEALTH INVESTORS increased its bottom line by earning $3.03 versus $2.76 in the prior year. This year, the market expects an improvement in earnings ($3.35 versus $3.03).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 33.0% when compared to the same quarter one year prior, rising from $25.25 million to $33.60 million.
  • Net operating cash flow has increased to $40.80 million or 29.13% 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 NATIONAL HEALTH INVESTORS is currently very high, coming in at 76.57%. Regardless of NHI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NHI's net profit margin of 57.90% significantly outperformed against the industry.

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TC Pipelines

Dividend Yield: 8.20%

TC Pipelines (NYSE: TCP) shares currently have a dividend yield of 8.20%.

TC PipeLines, LP acquires, owns, and participates in the management of energy infrastructure businesses in North America. The company has a P/E ratio of 14.12.

The average volume for TC Pipelines has been 188,400 shares per day over the past 30 days. TC Pipelines has a market cap of $2.8 billion and is part of the energy industry. Shares are down 21.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates TC Pipelines as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and growth in earnings per share. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 36.8%. Since the same quarter one year prior, revenues slightly increased by 3.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TC PIPELINES LP has improved earnings per share by 45.8% 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, TC PIPELINES LP increased its bottom line by earning $2.67 versus $2.13 in the prior year. This year, the market expects an improvement in earnings ($2.97 versus $2.67).
  • 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 58.1% when compared to the same quarter one year prior, rising from $31.00 million to $49.00 million.
  • 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TC PIPELINES LP's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for TC PIPELINES LP is currently very high, coming in at 79.52%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 59.03% significantly outperformed against the industry average.

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