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 "Sell."

Capstead Mortgage

Dividend Yield: 10.80%

Capstead Mortgage

(NYSE:

CMO

) shares currently have a dividend yield of 10.80%.

Capstead Mortgage Corporation operates as a real estate investment trust (REIT) in the United States. The company has a P/E ratio of 9.33.

The average volume for Capstead Mortgage has been 873,200 shares per day over the past 30 days. Capstead Mortgage has a market cap of $920.9 million and is part of the real estate industry. Shares are down 21.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Capstead Mortgage

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Real Estate Investment Trusts (REITs) industry average. The net income has significantly decreased by 35.0% when compared to the same quarter one year ago, falling from $32.39 million to $21.07 million.
  • 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, CAPSTEAD MORTGAGE CORP's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $55.06 million or 3.12% 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.
  • The share price of CAPSTEAD MORTGAGE CORP has not done very well: it is down 24.53% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • CAPSTEAD MORTGAGE CORP's earnings per share declined by 40.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CAPSTEAD MORTGAGE CORP increased its bottom line by earning $1.33 versus $0.93 in the prior year. For the next year, the market is expecting a contraction of 28.6% in earnings ($0.95 versus $1.33).

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Medley Management

Dividend Yield: 13.20%

Medley Management

(NYSE:

MDLY

) shares currently have a dividend yield of 13.20%.

Medley Management Inc. is an investment holding company and operate and control all of the business and affairs of Medley LLC and its subsidiaries. Medley Management Inc. is based in New York, New York. The company has a P/E ratio of 10.61.

The average volume for Medley Management has been 29,400 shares per day over the past 30 days. Medley Management has a market cap of $36.4 million and is part of the financial services industry. Shares are down 58.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Medley Management

as a

sell

. Among the areas we feel are negative, one of the most important has been unimpressive growth in net income over time.

Highlights from the ratings report include:

  • The change in net income from the same quarter one year ago has exceeded that of the Capital Markets industry average, but is less than that of the S&P 500. The net income has significantly decreased by 28.0% when compared to the same quarter one year ago, falling from $0.38 million to $0.27 million.
  • MDLY, with its decline in revenue, underperformed when compared the industry average of 5.7%. Since the same quarter one year prior, revenues fell by 23.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • MEDLEY MANAGEMENT INC's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($0.67 versus $0.24).
  • Looking at the price performance of MDLY's shares over the past 12 months, there is not much good news to report: the stock is down 62.73%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter.
  • The gross profit margin for MEDLEY MANAGEMENT INC is currently very high, coming in at 72.04%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, MDLY's net profit margin of 1.72% significantly trails the industry average.

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Tribune Publishing

Dividend Yield: 7.40%

Tribune Publishing

(NYSE:

TPUB

) shares currently have a dividend yield of 7.40%.

Tribune Publishing Company, a multiplatform media and marketing solutions company, publishes and operates newspapers for audiences and advertisers.

The average volume for Tribune Publishing has been 231,600 shares per day over the past 30 days. Tribune Publishing has a market cap of $247.6 million and is part of the media industry. Shares are down 58.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Tribune Publishing

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • TRIBUNE PUBLISHING CO 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. For the next year, the market is expecting a contraction of 41.9% in earnings ($0.96 versus $1.65).
  • 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 Media industry. The net income has significantly decreased by 2062.8% when compared to the same quarter one year ago, falling from -$0.16 million to -$3.37 million.
  • The debt-to-equity ratio is very high at 63.76 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, TPUB maintains a poor quick ratio of 0.90, which illustrates the inability to avoid short-term cash problems.
  • The gross profit margin for TRIBUNE PUBLISHING CO is currently extremely low, coming in at 3.76%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.83% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $22.17 million or 54.60% 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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