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."

Physicians Realty

Dividend Yield: 5.50%

Physicians Realty (NYSE: DOC) shares currently have a dividend yield of 5.50%.

Physicians Realty Trust, a self-managed healthcare real estate company, focuses on the acquisition, development, ownership, and management of healthcare properties that are leased to physicians, hospitals, and healthcare delivery systems. The company has a P/E ratio of 95.82.

The average volume for Physicians Realty has been 785,700 shares per day over the past 30 days. Physicians Realty has a market cap of $1.4 billion and is part of the real estate industry. Shares are down 0.7% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Physicians Realty as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, good cash flow from operations, impressive record of earnings per share growth 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:
  • DOC's very impressive revenue growth greatly exceeded the industry average of 6.1%. Since the same quarter one year prior, revenues leaped by 146.0%. 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 Real Estate Investment Trusts (REITs) industry. The net income increased by 276.9% when compared to the same quarter one year prior, rising from -$2.09 million to $3.70 million.
  • Net operating cash flow has significantly increased by 443.03% to $19.19 million when compared to the same quarter last year. In addition, PHYSICIANS REALTY TR has also vastly surpassed the industry average cash flow growth rate of 9.43%.
  • PHYSICIANS REALTY TR 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, PHYSICIANS REALTY TR reported poor results of -$0.19 versus -$0.11 in the prior year. This year, the market expects an improvement in earnings ($0.16 versus -$0.19).
  • 41.42% is the gross profit margin for PHYSICIANS REALTY TR which we consider to be strong. Regardless of DOC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DOC's net profit margin of 10.61% is significantly lower than the industry average.

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Ship Finance International

Dividend Yield: 14.90%

Ship Finance International (NYSE: SFL) shares currently have a dividend yield of 14.90%.

Ship Finance International Limited owns and operates vessels and offshore related assets in Bermuda, Cyprus, Malta, Liberia, Norway, Singapore, the United Kingdom, and the Marshall Islands. It is also involved in the charter, purchase, and sale of assets. The company has a P/E ratio of 12.21.

The average volume for Ship Finance International has been 911,900 shares per day over the past 30 days. Ship Finance International has a market cap of $1.1 billion and is part of the transportation industry. Shares are down 23.9% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Ship Finance International as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. 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 36.5%. Since the same quarter one year prior, revenues rose by 33.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SHIP FINANCE INTL LTD has improved earnings per share by 26.5% 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, SHIP FINANCE INTL LTD increased its bottom line by earning $1.25 versus $1.01 in the prior year. This year, the market expects an improvement in earnings ($2.35 versus $1.25).
  • 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 31.5% when compared to the same quarter one year prior, rising from $34.59 million to $45.49 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, SHIP FINANCE INTL LTD's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for SHIP FINANCE INTL LTD is rather high; currently it is at 69.10%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 41.08% significantly outperformed against the industry average.

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Hospitality Properties

Dividend Yield: 9.10%

Hospitality Properties (NYSE: HPT) shares currently have a dividend yield of 9.10%.

Hospitality Properties Trust, a real estate investment trust (REIT), engages in buying, owning, and leasing hotels. The company has a P/E ratio of 15.03.

The average volume for Hospitality Properties has been 982,600 shares per day over the past 30 days. Hospitality Properties has a market cap of $3.3 billion and is part of the real estate industry. Shares are down 13.1% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Hospitality Properties as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • HPT's revenue growth has slightly outpaced the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 11.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HOSPITALITY PROPERTIES TRUST has improved earnings per share by 27.6% 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, HOSPITALITY PROPERTIES TRUST increased its bottom line by earning $1.18 versus $0.73 in the prior year. This year, the market expects an improvement in earnings ($1.59 versus $1.18).
  • 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 Real Estate Investment Trusts (REITs) industry average. The net income increased by 24.4% when compared to the same quarter one year prior, going from $49.20 million to $61.19 million.
  • Net operating cash flow has increased to $122.85 million or 12.24% when compared to the same quarter last year. In addition, HOSPITALITY PROPERTIES TRUST has also modestly surpassed the industry average cash flow growth rate of 9.43%.

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