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."

Garmin

Dividend Yield: 5.20%

Garmin (NASDAQ: GRMN) shares currently have a dividend yield of 5.20%.

Garmin Ltd., together with its subsidiaries, designs, develops, manufactures, markets, and distributes a range of navigation, communication, and information devices worldwide. It operates through five segments: Auto, Aviation, Marine, Outdoor, and Fitness. The company has a P/E ratio of 16.33.

The average volume for Garmin has been 1,635,800 shares per day over the past 30 days. Garmin has a market cap of $8.1 billion and is part of the electronics industry. Shares are up 5.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Garmin as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • GRMN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, GRMN has a quick ratio of 1.82, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has slightly increased to $158.34 million or 9.18% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -13.42%.
  • The gross profit margin for GARMIN LTD is rather high; currently it is at 54.59%. Regardless of GRMN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GRMN's net profit margin of 16.94% significantly outperformed against the industry.
  • 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 Household Durables industry and the overall market on the basis of return on equity, GARMIN LTD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • GRMN, with its decline in revenue, slightly underperformed the industry average of 2.2%. Since the same quarter one year prior, revenues slightly dropped by 2.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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Meredith

Dividend Yield: 4.40%

Meredith (NYSE: MDP) shares currently have a dividend yield of 4.40%.

Meredith Corporation operates as a diversified media company that focuses primarily on the home and family marketplace in the United States. It operates in two segments, Local Media and National Media. The company has a P/E ratio of 18.12.

The average volume for Meredith has been 301,700 shares per day over the past 30 days. Meredith has a market cap of $2.0 billion and is part of the media industry. Shares are up 5.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Meredith as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.9%. Since the same quarter one year prior, revenues slightly increased by 1.9%. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.83, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that MDP's debt-to-equity ratio is low, the quick ratio, which is currently 0.63, displays a potential problem in covering short-term cash needs.
  • MEREDITH CORP's earnings per share declined by 17.2% 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, MEREDITH CORP increased its bottom line by earning $3.02 versus $2.50 in the prior year. This year, the market expects an improvement in earnings ($3.17 versus $3.02).
  • The gross profit margin for MEREDITH CORP is rather high; currently it is at 62.83%. Regardless of MDP'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 8.00% trails the industry average.

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Buckeye Partners

Dividend Yield: 7.30%

Buckeye Partners (NYSE: BPL) shares currently have a dividend yield of 7.30%.

Buckeye Partners, L.P. owns and operates liquid petroleum products pipeline systems in the United States. The company operates through three segments: Domestic Pipelines & Terminals, Global Marine Terminals, and Merchant Services. The company has a P/E ratio of 19.17.

The average volume for Buckeye Partners has been 951,200 shares per day over the past 30 days. Buckeye Partners has a market cap of $8.5 billion and is part of the energy industry. Shares are up 2.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Buckeye Partners as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income 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:
  • BUCKEYE PARTNERS LP reported significant earnings per share improvement 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, BUCKEYE PARTNERS LP increased its bottom line by earning $3.40 versus $2.79 in the prior year. This year, the market expects an improvement in earnings ($4.24 versus $3.40).
  • 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 137.1% when compared to the same quarter one year prior, rising from $56.52 million to $133.99 million.
  • BPL, with its decline in revenue, slightly underperformed the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 34.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for BUCKEYE PARTNERS LP is currently lower than what is desirable, coming in at 30.81%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, BPL's net profit margin of 15.94% significantly outperformed against the industry.
  • BPL has underperformed the S&P 500 Index, declining 13.25% 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 is one of the factors that makes this stock an attractive investment.

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