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."

Gramercy Property

Dividend Yield: 14.90%

Gramercy Property (NYSE: GPT) shares currently have a dividend yield of 14.90%.

Gramercy Property Trust, Inc. is an equity real estate investment trust. The firm invests in the real estate markets of the United States. It makes investments in industrial and office properties to create its portfolio. The firm was formerly known as Gramercy Capital Corp.

The average volume for Gramercy Property has been 2,506,600 shares per day over the past 30 days. Gramercy Property has a market cap of $3.7 billion and is part of the real estate industry. Shares are up 14.4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Gramercy Property as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth and solid stock price performance. 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:
  • GPT's very impressive revenue growth greatly exceeded the industry average of 11.1%. Since the same quarter one year prior, revenues leaped by 145.7%. 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.
  • Compared to where it was trading a year ago, GPT's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed results. 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.
  • GRAMERCY PROPERTY TRUST 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. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, GRAMERCY PROPERTY TRUST swung to a loss, reporting -$0.25 versus $0.64 in the prior year. This year, the market expects an improvement in earnings ($0.12 versus -$0.25).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, GRAMERCY PROPERTY TRUST's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for GRAMERCY PROPERTY TRUST is currently lower than what is desirable, coming in at 26.19%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.79% is significantly below that of the industry average.

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Medical Properties

Dividend Yield: 6.20%

Medical Properties (NYSE: MPW) shares currently have a dividend yield of 6.20%.

Medical Properties Trust, Inc. operates as a real estate investment trust (REIT) in the United States. It acquires, develops, and invests in healthcare facilities; and leases healthcare facilities to healthcare operating companies and healthcare providers. The company has a P/E ratio of 22.40.

The average volume for Medical Properties has been 1,732,200 shares per day over the past 30 days. Medical Properties has a market cap of $3.4 billion and is part of the real estate industry. Shares are up 22.4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Medical Properties as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 11.1%. Since the same quarter one year prior, revenues rose by 40.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MEDICAL PROPERTIES TRUST has improved earnings per share by 41.2% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, MEDICAL PROPERTIES TRUST increased its bottom line by earning $0.62 versus $0.28 in the prior year. This year, the market expects an improvement in earnings ($1.03 versus $0.62).
  • Compared to where it was trading a year ago, MPW's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed results. 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 gross profit margin for MEDICAL PROPERTIES TRUST is currently very high, coming in at 83.67%. Regardless of MPW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MPW's net profit margin of 42.90% compares favorably to 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, MEDICAL PROPERTIES TRUST's return on equity is below that of both the industry average and the S&P 500.

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Washington REIT

Dividend Yield: 4.10%

Washington REIT (NYSE: WRE) shares currently have a dividend yield of 4.10%.

Washington Real Estate Investment Trust is an equity real estate investment trust (REIT). The company engages in the ownership, operation, and development of real properties. The firm invests in real estate markets of the greater Washington D.C. metro region. The company has a P/E ratio of 31.87.

The average volume for Washington REIT has been 447,000 shares per day over the past 30 days. Washington REIT has a market cap of $2.0 billion and is part of the real estate industry. Shares are up 7.2% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Washington REIT as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 2.8%. 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.
  • 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, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • The gross profit margin for WASHINGTON REIT is currently lower than what is desirable, coming in at 29.03%. Regardless of WRE's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, WRE's net profit margin of 3.08% is significantly lower than the industry average.
  • 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 91.9% when compared to the same quarter one year ago, falling from $29.51 million to $2.38 million.

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