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 11.72. The average volume for Verizon Communications has been 15,794,800 shares per day over the past 30 days. Verizon Communications has a market cap of $210.6 billion and is part of the telecommunications industry. Shares are up 10.4% year-to-date as of the close of trading on Thursday. 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 Verizon Communications as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, expanding profit margins, growth in earnings per share and increase in net income. 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:

  • VZ's revenue growth trails the industry average of 15.1%. Since the same quarter one year prior, revenues slightly increased by 0.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • After a year of stock price fluctuations, the net result is that VZ'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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 60.80%. Regardless of VZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VZ's net profit margin of 13.39% compares favorably to the industry average.
  • VERIZON COMMUNICATIONS INC'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 year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, VERIZON COMMUNICATIONS INC increased its bottom line by earning $4.37 versus $2.51 in the prior year. For the next year, the market is expecting a contraction of 8.8% in earnings ($3.99 versus $4.37).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Diversified Telecommunication Services industry average, but is greater than that of the S&P 500. The net income increased by 2.1% when compared to the same quarter one year prior, going from $4,219.00 million to $4,310.00 million.
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Agrium Dividend Yield: 4.10% Agrium (NYSE: AGU) shares currently have a dividend yield of 4.10%. Agrium Inc. produces, markets, and distributes crop nutrients, crop protection products, seeds, and merchandise products primarily in the United States, Canada, Australia, and South America. It operates in two segments, Retail and Wholesale. The company has a P/E ratio of 12.35. The average volume for Agrium has been 1,029,000 shares per day over the past 30 days. Agrium has a market cap of $11.9 billion and is part of the chemicals industry. Shares are down 2.6% year-to-date as of the close of trading on Thursday. 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 Agrium as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, reasonable valuation levels, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 327.6% when compared to the same quarter one year prior, rising from $47.00 million to $201.00 million.
  • Net operating cash flow has increased to $1,093.00 million or 11.75% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -14.63%.
  • 40.09% is the gross profit margin for AGRIUM INC which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 8.35% trails the industry average.
  • The debt-to-equity ratio is somewhat low, currently at 0.89, 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 AGU's debt-to-equity ratio is low, the quick ratio, which is currently 0.54, displays a potential problem in covering short-term cash needs.
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Meredith Dividend Yield: 4.10% Meredith (NYSE: MDP) shares currently have a dividend yield of 4.10%. 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 19.69. The average volume for Meredith has been 275,500 shares per day over the past 30 days. Meredith has a market cap of $2.2 billion and is part of the media industry. Shares are up 16% year-to-date as of the close of trading on Thursday. 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 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 8.0%. 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 ($3.16 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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