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."

Cedar Fair

Dividend Yield: 5.20%

Cedar Fair (NYSE: FUN) shares currently have a dividend yield of 5.20%.

Cedar Fair, L.P. owns and operates amusement and water parks, and hotels in the United States and Canada. As of February 17, 2016, the company operated approximately 11 amusement parks, 3 outdoor water parks, 1 indoor water park, and 5 hotels. The company has a P/E ratio of 23.94.

The average volume for Cedar Fair has been 138,000 shares per day over the past 30 days. Cedar Fair has a market cap of $3.5 billion and is part of the leisure industry. Shares are up 12.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Cedar Fair as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 10.7%. Since the same quarter one year prior, revenues rose by 24.8%. Growth in the company's revenue appears to have helped boost the 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. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • CEDAR FAIR -LP has improved earnings per share by 42.0% 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, CEDAR FAIR -LP increased its bottom line by earning $1.98 versus $1.86 in the prior year. This year, the market expects an improvement in earnings ($3.61 versus $1.98).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Hotels, Restaurants & Leisure industry average. The net income increased by 42.2% when compared to the same quarter one year prior, rising from -$83.83 million to -$48.49 million.
  • Net operating cash flow has decreased to -$67.84 million or 12.60% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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Prospect Capital

Dividend Yield: 12.00%

Prospect Capital (NASDAQ: PSEC) shares currently have a dividend yield of 12.00%.

Prospect Capital Corporation is a business development company. The company has a P/E ratio of 8.40.

The average volume for Prospect Capital has been 1,843,400 shares per day over the past 30 days. Prospect Capital has a market cap of $3.0 billion and is part of the financial services industry. Shares are up 18.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Prospect Capital as a buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The gross profit margin for PROSPECT CAPITAL CORP is rather high; currently it is at 68.26%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 39.84% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 480.56% to $229.62 million when compared to the same quarter last year. In addition, PROSPECT CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of -146.35%.
  • Despite the weak revenue results, PSEC has outperformed against the industry average of 24.3%. Since the same quarter one year prior, revenues slightly dropped by 1.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • PROSPECT CAPITAL CORP's earnings per share declined by 8.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, PROSPECT CAPITAL CORP reported lower earnings of $0.97 versus $1.08 in the prior year. This year, the market expects an improvement in earnings ($1.03 versus $0.97).
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Capital Markets industry average, but is less than that of the S&P 500. The net income has decreased by 7.3% when compared to the same quarter one year ago, dropping from $81.49 million to $75.51 million.

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Spectra Energy

Dividend Yield: 4.40%

Spectra Energy (NYSE: SE) shares currently have a dividend yield of 4.40%.

Spectra Energy Corp owns and operates a portfolio of natural gas-related energy assets in North America. It operates through four segments: Spectra Energy Partners, Distribution, Western Canada Transmission & Processing, and Field Services. The company has a P/E ratio of 153.08.

The average volume for Spectra Energy has been 4,222,700 shares per day over the past 30 days. Spectra Energy has a market cap of $25.1 billion and is part of the energy industry. Shares are up 53.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Spectra Energy as a buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins and solid stock price performance. 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:
  • 49.64% is the gross profit margin for SPECTRA ENERGY CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.90% significantly outperformed against the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 23.9%. Since the same quarter one year prior, revenues fell by 14.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • SPECTRA ENERGY CORP's earnings per share declined by 12.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SPECTRA ENERGY CORP reported lower earnings of $0.30 versus $1.61 in the prior year. This year, the market expects an improvement in earnings ($1.19 versus $0.30).
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 12.4% when compared to the same quarter one year ago, dropping from $267.00 million to $234.00 million.
  • 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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