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." Domtar Dividend Yield: 4.10% Domtar (NYSE: UFS) shares currently have a dividend yield of 4.10%. Domtar Corporation designs, manufactures, markets, and distributes communications papers, specialty and packaging papers, and absorbent hygiene products in the United States, Canada, Europe, Asia, and internationally. It operates through two segments, Pulp and Paper, and Personal Care. The company has a P/E ratio of 22.32. The average volume for Domtar has been 672,200 shares per day over the past 30 days. Domtar has a market cap of $2.4 billion and is part of the consumer non-durables industry. Shares are up 0.9% 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 Domtar as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins. Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.98 is somewhat weak and could be cause for future problems.
  • UFS, with its decline in revenue, slightly underperformed the industry average of 0.8%. Since the same quarter one year prior, revenues slightly dropped by 4.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for DOMTAR CORP is rather low; currently it is at 18.41%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.31% trails that of the industry average.
  • Net operating cash flow has decreased to $97.00 million or 23.62% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
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Enbridge Energy Partners Dividend Yield: 10.80% Enbridge Energy Partners (NYSE: EEP) shares currently have a dividend yield of 10.80%. Enbridge Energy Partners, L.P. owns and operates a diversified portfolio of crude oil and natural gas transportation systems in the United States. It operates through two segments, Liquids and Natural Gas. The company has a P/E ratio of 360.33. The average volume for Enbridge Energy Partners has been 1,553,900 shares per day over the past 30 days. Enbridge Energy Partners has a market cap of $9.2 billion and is part of the energy industry. Shares are down 6.4% 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 Enbridge Energy Partners as a hold. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including generally higher debt management risk, disappointing return on equity and weak operating cash flow. Highlights from the ratings report include:

  • The gross profit margin for ENBRIDGE ENERGY PRTNRS -LP is rather high; currently it is at 60.36%. It has increased significantly from the same period last year. Along with this, the net profit margin of 9.75% is above that of the industry average.
  • Despite the weak revenue results, EEP has significantly outperformed against the industry average of 57.2%. Since the same quarter one year prior, revenues fell by 25.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $266.30 million or 30.01% when compared to the same quarter last year. Despite a decrease in cash flow ENBRIDGE ENERGY PRTNRS -LP is still fairing well by exceeding its industry average cash flow growth rate of -41.78%.
  • Currently the debt-to-equity ratio of 1.75 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.22, which clearly demonstrates the inability to cover short-term cash needs.
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Colony Capital Dividend Yield: 9.00% Colony Capital (NYSE: CLNY) shares currently have a dividend yield of 9.00%. Colony Capital, Inc. is a real estate investment trust. The firm invests in the real estate markets of North America and Europe. The company has a P/E ratio of 18.44. The average volume for Colony Capital has been 992,800 shares per day over the past 30 days. Colony Capital has a market cap of $2.0 billion and is part of the real estate industry. Shares are down 10.4% 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 Colony Capital as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself. Highlights from the ratings report include:

  • CLNY's very impressive revenue growth greatly exceeded the industry average of 5.0%. Since the same quarter one year prior, revenues leaped by 182.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • COLONY CAPITAL INC has improved earnings per share by 6.3% 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, COLONY CAPITAL INC reported lower earnings of $0.92 versus $1.00 in the prior year. This year, the market expects an improvement in earnings ($1.20 versus $0.92).
  • CLNY's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 33.07%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, COLONY CAPITAL INC's return on equity is below that of both the industry average and the S&P 500.
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