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."

B&G Foods

Dividend Yield: 5.20%

B&G Foods (NYSE: BGS) shares currently have a dividend yield of 5.20%.

B&G Foods, Inc. manufactures, sells, and distributes a portfolio of shelf-stable, and frozen food and household products in the United States, Canada, and Puerto Rico. The company has a P/E ratio of 26.97.

The average volume for B&G Foods has been 736,600 shares per day over the past 30 days. B&G Foods has a market cap of $1.9 billion and is part of the food & beverage industry. Shares are down 8.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates B&G Foods as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 8.3%. Since the same quarter one year prior, revenues rose by 41.4%. 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 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 Food Products industry and the overall market, B&G FOODS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has slightly increased to $41.78 million or 8.70% when compared to the same quarter last year. Despite an increase in cash flow of 8.70%, B&G FOODS INC is still growing at a significantly lower rate than the industry average of 77.66%.
  • B&G FOODS INC's earnings per share declined by 9.5% 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, B&G FOODS INC increased its bottom line by earning $1.22 versus $0.76 in the prior year. This year, the market expects an improvement in earnings ($1.93 versus $1.22).
  • 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. We feel, however, that the other strengths this company displays justify these higher price levels.

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PacWest Bancorp

Dividend Yield: 5.20%

PacWest Bancorp (NASDAQ: PACW) shares currently have a dividend yield of 5.20%.

PacWest Bancorp operates as the holding company for Pacific Western Bank that provides commercial banking products and services. The company accepts demand, money market, and time deposits. The company has a P/E ratio of 14.27.

The average volume for PacWest Bancorp has been 1,420,400 shares per day over the past 30 days. PacWest Bancorp has a market cap of $4.6 billion and is part of the banking industry. Shares are down 7.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates PacWest Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, expanding profit margins, growth in earnings per share and attractive valuation levels. 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 6.5%. Since the same quarter one year prior, revenues rose by 24.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 23.8% when compared to the same quarter one year prior, going from $73.08 million to $90.46 million.
  • The gross profit margin for PACWEST BANCORP is currently very high, coming in at 88.16%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 30.79% significantly outperformed against the industry average.
  • PACWEST BANCORP's earnings per share improvement from the most recent quarter was slightly positive. 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, PACWEST BANCORP increased its bottom line by earning $2.82 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($2.92 versus $2.82).

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Pebblebrook Hotel

Dividend Yield: 5.40%

Pebblebrook Hotel (NYSE: PEB) shares currently have a dividend yield of 5.40%.

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 29.48.

The average volume for Pebblebrook Hotel has been 967,400 shares per day over the past 30 days. Pebblebrook Hotel has a market cap of $2.0 billion and is part of the real estate industry. Shares are down 0.2% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Pebblebrook Hotel as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 8.0%. Since the same quarter one year prior, revenues rose by 22.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PEBBLEBROOK HOTEL TRUST 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, PEBBLEBROOK HOTEL TRUST increased its bottom line by earning $0.94 versus $0.72 in the prior year. This year, the market expects an improvement in earnings ($1.23 versus $0.94).
  • 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 43.7% when compared to the same quarter one year prior, rising from $15.95 million to $22.92 million.
  • Net operating cash flow has increased to $62.39 million or 47.32% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.72%.

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