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."

Old National Bancorp

Dividend Yield: 4.60%

Old National Bancorp (NASDAQ: ONB) shares currently have a dividend yield of 4.60%.

Old National Bancorp operates as the holding company for Old National Bank, which provides various financial services to individual and commercial customers in the United States. It operates in two segments, Banking and Insurance. The company has a P/E ratio of 11.39.

The average volume for Old National Bancorp has been 1,072,100 shares per day over the past 30 days. Old National Bancorp has a market cap of $1.3 billion and is part of the banking industry. Shares are down 15.5% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Old National Bancorp as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share and increase 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:
  • ONB's revenue growth has slightly outpaced the industry average of 0.2%. Since the same quarter one year prior, revenues slightly increased by 5.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • OLD NATIONAL BANCORP has improved earnings per share by 8.0% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, OLD NATIONAL BANCORP increased its bottom line by earning $1.00 versus $0.95 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $1.00).
  • The gross profit margin for OLD NATIONAL BANCORP is currently very high, coming in at 93.88%. Regardless of ONB'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 20.55% trails the industry average.
  • 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. When compared to other companies in the Commercial Banks industry and the overall market, OLD NATIONAL BANCORP's return on equity is below that of both the industry average and the S&P 500.
  • ONB has underperformed the S&P 500 Index, declining 18.27% 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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Pebblebrook Hotel

Dividend Yield: 4.60%

Pebblebrook Hotel (NYSE: PEB) shares currently have a dividend yield of 4.60%.

Pebblebrook Hotel Trust, through Pebblebrook Hotel, L.P., operates as a real estate investment trust. The company acquires and invests primarily in hotel properties located in the United States. The company has a P/E ratio of 31.92.

The average volume for Pebblebrook Hotel has been 985,600 shares per day over the past 30 days. Pebblebrook Hotel has a market cap of $1.9 billion and is part of the real estate industry. Shares are down 3.5% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Pebblebrook Hotel as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 26.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PEBBLEBROOK HOTEL TRUST has improved earnings per share by 19.4% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, PEBBLEBROOK HOTEL TRUST increased its bottom line by earning $0.72 versus $0.32 in the prior year. This year, the market expects an improvement in earnings ($0.95 versus $0.72).
  • PEB's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 45.96%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The gross profit margin for PEBBLEBROOK HOTEL TRUST is rather low; currently it is at 23.33%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 17.33% trails that of the industry average.

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AmeriGas Partners

Dividend Yield: 9.20%

AmeriGas Partners (NYSE: APU) shares currently have a dividend yield of 9.20%.

AmeriGas Partners, L.P. distributes propane and related equipment and supplies in the United States. It serves approximately 2 million residential, commercial, industrial, agricultural, wholesale, and motor fuel customers in 50 states through approximately 2,000 propane distribution locations. The company has a P/E ratio of 9.05.

The average volume for AmeriGas Partners has been 431,200 shares per day over the past 30 days. AmeriGas Partners has a market cap of $3.7 billion and is part of the utilities industry. Shares are up 19.6% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates AmeriGas Partners as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Gas Utilities industry. The net income increased by 304.6% when compared to the same quarter one year prior, rising from -$39.57 million to $80.97 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Gas Utilities industry and the overall market, AMERIGAS PARTNERS -LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 349.48% to $35.98 million when compared to the same quarter last year. Despite an increase in cash flow of 349.48%, AMERIGAS PARTNERS -LP is still growing at a significantly lower rate than the industry average of 1991.87%.
  • APU has underperformed the S&P 500 Index, declining 20.43% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The debt-to-equity ratio is very high at 2.15 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.45, which clearly demonstrates the inability to cover short-term cash needs.

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