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."

Columbia Property

Dividend Yield: 5.50%

Columbia Property

(NYSE:

CXP

) shares currently have a dividend yield of 5.50%.

Columbia Property Trust, Inc is an equity real estate investment trust. The firm invests in the real estate markets of the United States. It focuses on investing in and managing high-quality commercial office properties. The firm was formerly known as Wells Real Estate Investment Trust II Inc. The company has a P/E ratio of 59.06.

The average volume for Columbia Property has been 630,200 shares per day over the past 30 days. Columbia Property has a market cap of $2.7 billion and is part of the real estate industry. Shares are down 10.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Columbia Property

as a

sell

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

Highlights from the ratings report include:

  • The share price of COLUMBIA PROPERTY TRUST INC has not done very well: it is down 17.97% 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. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • 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 81.9% when compared to the same quarter one year ago, falling from $56.23 million to $10.17 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, COLUMBIA PROPERTY TRUST INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $48.10 million or 26.87% 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 gross profit margin for COLUMBIA PROPERTY TRUST INC is currently lower than what is desirable, coming in at 25.78%. Regardless of CXP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CXP's net profit margin of 7.56% is significantly lower than the industry average.

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ARMOUR Residential REIT

Dividend Yield: 15.00%

ARMOUR Residential REIT

(NYSE:

ARR

) shares currently have a dividend yield of 15.00%.

ARMOUR Residential REIT, Inc. invests in residential mortgage backed securities in the United States. The company is managed by ARMOUR Capital Management LP.

The average volume for ARMOUR Residential REIT has been 552,200 shares per day over the past 30 days. ARMOUR Residential REIT has a market cap of $794.9 million and is part of the real estate industry. Shares are down 1.4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

ARMOUR Residential REIT

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has decreased to $57.77 million or 47.44% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • ARR has underperformed the S&P 500 Index, declining 14.86% from its price level of one year ago. 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ARMOUR RESIDENTIAL REIT INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The revenue fell significantly faster than the industry average of 8.0%. Since the same quarter one year prior, revenues fell by 28.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for ARMOUR RESIDENTIAL REIT INC is currently very high, coming in at 87.77%. Regardless of ARR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ARR's net profit margin of 156.44% significantly outperformed against the industry.

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Enbridge Energy Partners

Dividend Yield: 12.20%

Enbridge Energy Partners

(NYSE:

EEP

) shares currently have a dividend yield of 12.20%.

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 85.16.

The average volume for Enbridge Energy Partners has been 1,704,600 shares per day over the past 30 days. Enbridge Energy Partners has a market cap of $8.2 billion and is part of the energy industry. Shares are down 8.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Enbridge Energy Partners

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, weak operating cash flow, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 87.3% when compared to the same quarter one year ago, falling from $240.40 million to $30.50 million.
  • Currently the debt-to-equity ratio of 1.62 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.
  • Net operating cash flow has significantly decreased to -$23.50 million or 107.22% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, ENBRIDGE ENERGY PRTNRS -LP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 47.54%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 127.45% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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