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."

Tallgrass Energy Partners

Dividend Yield: 6.80%

Tallgrass Energy Partners (NYSE: TEP) shares currently have a dividend yield of 6.80%.

Tallgrass Energy Partners, LP acquires, owns, develops, and operates various midstream energy assets in North America. The company operates through three segments: Crude Oil Transportation & Logistics, Natural Gas Transportation & Logistics, and Processing & Logistics. The company has a P/E ratio of 24.70.

The average volume for Tallgrass Energy Partners has been 530,700 shares per day over the past 30 days. Tallgrass Energy Partners has a market cap of $3.2 billion and is part of the energy industry. Shares are up 9.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Tallgrass Energy Partners as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and compelling growth in net income. 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 24.0%. Since the same quarter one year prior, revenues rose by 26.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TALLGRASS ENERGY PRT LP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • The gross profit margin for TALLGRASS ENERGY PRT LP is rather high; currently it is at 56.86%. It has increased significantly from the same period last year. Along with this, the net profit margin of 30.30% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 82.48% to $88.76 million when compared to the same quarter last year. In addition, TALLGRASS ENERGY PRT LP has also vastly surpassed the industry average cash flow growth rate of -49.80%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 36.4% when compared to the same quarter one year prior, rising from $32.32 million to $44.07 million.

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Valley National Bancorp

Dividend Yield: 4.70%

Valley National Bancorp (NYSE: VLY) shares currently have a dividend yield of 4.70%.

Valley National Bancorp operates as the holding company for the Valley National Bank that provides commercial, retail, trust, and investment services. The company operates through Commercial Lending, Consumer Lending, and Investment Management segments. The company has a P/E ratio of 21.72.

The average volume for Valley National Bancorp has been 1,919,200 shares per day over the past 30 days. Valley National Bancorp has a market cap of $2.4 billion and is part of the banking industry. Shares are down 4.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Valley National Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, expanding profit margins and growth in earnings per share. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • VLY's revenue growth has slightly outpaced the industry average of 0.0%. Since the same quarter one year prior, revenues slightly increased by 9.2%. 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 19.3% when compared to the same quarter one year prior, going from $30.34 million to $36.19 million.
  • Net operating cash flow has slightly increased to $54.73 million or 1.60% when compared to the same quarter last year. In addition, VALLEY NATIONAL BANCORP has also vastly surpassed the industry average cash flow growth rate of -155.59%.
  • The gross profit margin for VALLEY NATIONAL BANCORP is currently very high, coming in at 81.53%. 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 17.47% trails the industry average.
  • VALLEY NATIONAL BANCORP has improved earnings per share by 7.7% 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, VALLEY NATIONAL BANCORP reported lower earnings of $0.43 versus $0.57 in the prior year. This year, the market expects an improvement in earnings ($0.65 versus $0.43).

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Physicians Realty

Dividend Yield: 4.20%

Physicians Realty (NYSE: DOC) shares currently have a dividend yield of 4.20%.

Physicians Realty Trust, a self-managed healthcare real estate company, focuses on the acquisition, development, ownership, and management of healthcare properties that are leased to physicians, hospitals, and healthcare delivery systems. The company has a P/E ratio of 105.95.

The average volume for Physicians Realty has been 1,519,500 shares per day over the past 30 days. Physicians Realty has a market cap of $2.8 billion and is part of the real estate industry. Shares are up 23.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Physicians Realty 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, good cash flow from operations and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • DOC's very impressive revenue growth greatly exceeded the industry average of 11.9%. Since the same quarter one year prior, revenues leaped by 80.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PHYSICIANS REALTY TR 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, PHYSICIANS REALTY TR turned its bottom line around by earning $0.14 versus -$0.19 in the prior year. This year, the market expects an improvement in earnings ($0.26 versus $0.14).
  • 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 1182.0% when compared to the same quarter one year prior, rising from -$0.46 million to $4.93 million.
  • Net operating cash flow has significantly increased by 107.17% to $20.15 million when compared to the same quarter last year. In addition, PHYSICIANS REALTY TR has also vastly surpassed the industry average cash flow growth rate of 11.40%.
  • Powered by its strong earnings growth of 500.00% and other important driving factors, this stock has surged by 33.45% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.

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