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."

Annaly Capital Management

Dividend Yield: 11.50%

Annaly Capital Management (NYSE: NLY) shares currently have a dividend yield of 11.50%.

Annaly Capital Management, Inc. owns a portfolio of real estate related investments in the United States. The company has a P/E ratio of 24.74.

The average volume for Annaly Capital Management has been 8,912,900 shares per day over the past 30 days. Annaly Capital Management has a market cap of $9.7 billion and is part of the real estate industry. Shares are up 11.4% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates Annaly Capital Management as a hold. 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 attractive valuation levels. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:
  • ANNALY CAPITAL MANAGEMENT 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ANNALY CAPITAL MANAGEMENT turned its bottom line around by earning $0.42 versus -$0.96 in the prior year. This year, the market expects an improvement in earnings ($1.17 versus $0.42).
  • 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 201.8% when compared to the same quarter one year prior, rising from -$658.08 million to $670.04 million.
  • NLY, with its decline in revenue, slightly underperformed the industry average of 7.9%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • After a year of stock price fluctuations, the net result is that NLY's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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.
  • Net operating cash flow has significantly decreased to -$0.46 million or 100.03% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Main Street Capital

Dividend Yield: 6.90%

Main Street Capital (NYSE: MAIN) shares currently have a dividend yield of 6.90%.

Main Street Capital Corporation is a business development company specializing in long- term equity and debt investments in small and lower middle market companies. The company has a P/E ratio of 14.21.

The average volume for Main Street Capital has been 321,700 shares per day over the past 30 days. Main Street Capital has a market cap of $1.6 billion and is part of the financial services industry. Shares are up 7.8% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates Main Street Capital as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 4.3%. Since the same quarter one year prior, revenues rose by 12.2%. 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.
  • Net operating cash flow has significantly increased by 311.16% to $72.10 million when compared to the same quarter last year. In addition, MAIN STREET CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of 138.56%.
  • After a year of stock price fluctuations, the net result is that MAIN's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 65.7% when compared to the same quarter one year ago, falling from $21.99 million to $7.54 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Capital Markets industry and the overall market, MAIN STREET CAPITAL CORP's return on equity is below that of both the industry average and the S&P 500.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Vector Group

Dividend Yield: 7.00%

Vector Group (NYSE: VGR) shares currently have a dividend yield of 7.00%.

Vector Group Ltd., through its subsidiaries, manufactures and sells cigarettes in the United States. It operates through Tobacco, E-Cigarettes, and Real Estate segments. The company has a P/E ratio of 46.84.

The average volume for Vector Group has been 740,200 shares per day over the past 30 days. Vector Group has a market cap of $2.8 billion and is part of the tobacco industry. Shares are down 4.6% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates Vector Group as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 4.2%. 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.
  • VECTOR GROUP LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, VECTOR GROUP LTD increased its bottom line by earning $0.45 versus $0.34 in the prior year. This year, the market expects an improvement in earnings ($0.77 versus $0.45).
  • 41.19% is the gross profit margin for VECTOR GROUP LTD which we consider to be strong. Regardless of VGR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VGR's net profit margin of 2.04% is significantly lower than the industry average.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Tobacco industry. The net income has significantly decreased by 44.9% when compared to the same quarter one year ago, falling from $11.59 million to $6.38 million.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Other helpful dividend tools from TheStreet: