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."

Ryman Hospitality Properties

Dividend Yield: 5.80%

Ryman Hospitality Properties (NYSE: RHP) shares currently have a dividend yield of 5.80%.

Ryman Hospitality Properties, Inc. owns and operates hotels in the United States. The company has a P/E ratio of 24.07.

The average volume for Ryman Hospitality Properties has been 301,800 shares per day over the past 30 days. Ryman Hospitality Properties has a market cap of $2.6 billion and is part of the real estate industry. Shares are down 2.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Ryman Hospitality Properties as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth 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:
  • 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 7.0%. 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.
  • RYMAN HOSPITALITY PPTYS INC's earnings per share declined by 38.0% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, RYMAN HOSPITALITY PPTYS INC's EPS of $2.16 remained unchanged from the prior years' EPS of $2.16. This year, the market expects an improvement in earnings ($2.91 versus $2.16).
  • 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, RYMAN HOSPITALITY PPTYS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The share price of RYMAN HOSPITALITY PPTYS INC has not done very well: it is down 17.41% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 37.9% when compared to the same quarter one year ago, falling from $62.68 million to $38.90 million.

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Southern

Dividend Yield: 4.30%

Southern (NYSE: SO) shares currently have a dividend yield of 4.30%.

The Southern Company, together with its subsidiaries, engages in the generation, transmission, and distribution of electricity through coal, nuclear, oil and gas, and hydro resources in the states of Alabama, Georgia, Florida, and Mississippi. The company has a P/E ratio of 19.62.

The average volume for Southern has been 5,619,300 shares per day over the past 30 days. Southern has a market cap of $45.9 billion and is part of the utilities industry. Shares are up 8.3% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Southern as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins, notable return on equity, reasonable valuation levels and solid stock price performance. 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:
  • Net operating cash flow has slightly increased to $1,186.00 million or 5.14% when compared to the same quarter last year. In addition, SOUTHERN CO has also modestly surpassed the industry average cash flow growth rate of 1.58%.
  • SOUTHERN CO' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, SOUTHERN CO increased its bottom line by earning $2.60 versus $2.18 in the prior year. This year, the market expects an improvement in earnings ($2.85 versus $2.60).
  • 36.41% is the gross profit margin for SOUTHERN CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.93% 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. Compared to other companies in the Electric Utilities industry and the overall market on the basis of return on equity, SOUTHERN CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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GEO Group

Dividend Yield: 7.90%

GEO Group (NYSE: GEO) shares currently have a dividend yield of 7.90%.

The GEO Group, Inc. provides government-outsourced services specializing in the management of correctional, detention, and re-entry facilities, and the provision of community based services and youth services in the United States, Australia, South Africa, the United Kingdom, and Canada. The company has a P/E ratio of 17.36.

The average volume for GEO Group has been 530,400 shares per day over the past 30 days. GEO Group has a market cap of $2.4 billion and is part of the real estate industry. Shares are up 11.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates GEO Group as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, attractive valuation levels, increase in net income and growth in earnings per share. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • GEO's revenue growth has slightly outpaced the industry average of 7.9%. Since the same quarter one year prior, revenues rose by 16.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, GEO GROUP INC's return on equity exceeds that of both the industry average and the S&P 500.
  • 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 15.8% when compared to the same quarter one year prior, going from $38.05 million to $44.06 million.
  • GEO GROUP INC has improved earnings per share by 13.5% 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, GEO GROUP INC reported lower earnings of $1.88 versus $1.99 in the prior year. This year, the market expects an improvement in earnings ($2.02 versus $1.88).

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