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."

Verizon Communications

Dividend Yield: 4.40%

Verizon Communications (NYSE: VZ) shares currently have a dividend yield of 4.40%.

Verizon Communications Inc., through its subsidiaries, provides communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide. The company has a P/E ratio of 11.68.

The average volume for Verizon Communications has been 17,910,300 shares per day over the past 30 days. Verizon Communications has a market cap of $207.8 billion and is part of the telecommunications industry. Shares are up 9.8% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Verizon Communications as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, notable return on equity, expanding profit margins and good cash flow from operations. 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 341.6% when compared to the same quarter one year prior, rising from -$2,231.00 million to $5,391.00 million.
  • VZ's revenue growth trails the industry average of 15.2%. Since the same quarter one year prior, revenues slightly increased by 3.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 Diversified Telecommunication Services industry and the overall market, VERIZON COMMUNICATIONS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 57.06%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.73% is above that of the industry average.
  • Net operating cash flow has increased to $10,504.00 million or 40.54% when compared to the same quarter last year. Despite an increase in cash flow, VERIZON COMMUNICATIONS INC's average is still marginally south of the industry average growth rate of 45.74%.

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DHT Holdings

Dividend Yield: 14.60%

DHT Holdings (NYSE: DHT) shares currently have a dividend yield of 14.60%.

DHT Holdings, Inc. operates crude oil tankers in Bermuda. As of March 10, 2015, its fleet consisted of 18 crude oil tankers, including 14 very large crude carriers, 2 Suezmax tankers, and 2 Aframax tankers. The company was incorporated in 2005 and is headquartered in Hamilton, Bermuda. The company has a P/E ratio of 5.53.

The average volume for DHT Holdings has been 2,404,800 shares per day over the past 30 days. DHT Holdings has a market cap of $534.2 million and is part of the transportation industry. Shares are down 27.9% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates DHT Holdings as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, notable return on equity, attractive valuation levels 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:
  • The revenue growth greatly exceeded the industry average of 33.0%. Since the same quarter one year prior, revenues rose by 29.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, DHT HOLDINGS INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • The gross profit margin for DHT HOLDINGS INC is rather high; currently it is at 68.27%. It has increased significantly from the same period last year. Along with this, the net profit margin of 34.26% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 193.52% to $53.31 million when compared to the same quarter last year. In addition, DHT HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of -39.95%.

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FirstEnergy

Dividend Yield: 4.40%

FirstEnergy (NYSE: FE) shares currently have a dividend yield of 4.40%.

FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. The company operates through Regulated Distribution, Regulated Transmission, and Competitive Energy Services segments. The company has a P/E ratio of 23.96.

The average volume for FirstEnergy has been 4,500,300 shares per day over the past 30 days. FirstEnergy has a market cap of $13.9 billion and is part of the utilities industry. Shares are up 5.5% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates FirstEnergy 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, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 8.5%. Since the same quarter one year prior, revenues slightly increased by 1.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FIRSTENERGY CORP has improved earnings per share by 27.4% 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 year. We feel that this trend should continue. During the past fiscal year, FIRSTENERGY CORP increased its bottom line by earning $1.37 versus $0.50 in the prior year. This year, the market expects an improvement in earnings ($2.85 versus $1.37).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electric Utilities industry. The net income increased by 26.1% when compared to the same quarter one year prior, rising from -$306.00 million to -$226.00 million.
  • Net operating cash flow has increased to $1,130.00 million or 15.77% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.83%.
  • 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 Electric Utilities industry and the overall market, FIRSTENERGY CORP's return on equity is below that of both the industry average and the S&P 500.

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