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."

Dynagas LNG Partners

Dividend Yield: 12.30%

Dynagas LNG Partners

(NYSE:

DLNG

) shares currently have a dividend yield of 12.30%.

Dynagas LNG Partners LP, through its subsidiaries, operates in the seaborne transportation industry worldwide. The company owns and operates liquefied natural gas (LNG) vessels. The company has a P/E ratio of 8.41.

The average volume for Dynagas LNG Partners has been 68,300 shares per day over the past 30 days. Dynagas LNG Partners has a market cap of $281.1 million and is part of the transportation industry. Shares are down 21.3% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Dynagas LNG Partners

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from the ratings report include:

  • DLNG's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 30.13%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • Currently the debt-to-equity ratio of 1.51 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.55, which shows the ability to cover short-term cash needs.
  • DYNAGAS LNG PARTNERS LP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, DYNAGAS LNG PARTNERS LP increased its bottom line by earning $1.58 versus $0.62 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $1.58).
  • 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 14.6% when compared to the same quarter one year prior, going from $13.99 million to $16.04 million.
  • 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, DYNAGAS LNG PARTNERS LP's return on equity exceeds that of both the industry average and the S&P 500.

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Enable Midstream Partners

Dividend Yield: 11.90%

Enable Midstream Partners

(NYSE:

ENBL

) shares currently have a dividend yield of 11.90%.

Enable Midstream Partners, LP owns, operates, and develops natural gas and crude oil infrastructure assets in the United States. It operates through two segments, Gathering and Processing, and Transportation and Storage.

The average volume for Enable Midstream Partners has been 181,500 shares per day over the past 30 days. Enable Midstream Partners has a market cap of $2.3 billion and is part of the energy industry. Shares are down 49.8% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Enable Midstream Partners

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow 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 when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 808.6% when compared to the same quarter one year ago, falling from $139.00 million to -$985.00 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ENABLE MIDSTREAM PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ENABLE MIDSTREAM PARTNERS LP is currently lower than what is desirable, coming in at 33.13%. Regardless of ENBL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, ENBL's net profit margin of -152.47% significantly underperformed when compared to the industry average.
  • Net operating cash flow has decreased to $207.00 million or 23.04% when compared to the same quarter last year. Despite a decrease in cash flow of 23.04%, ENABLE MIDSTREAM PARTNERS LP is in line with the industry average cash flow growth rate of -25.83%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 54.75%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 806.06% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

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AdCare Health Systems

Dividend Yield: 7.90%

AdCare Health Systems

(AMEX:

ADK

) shares currently have a dividend yield of 7.90%.

AdCare Health Systems, Inc., through its subsidiaries, owns, operates, and manages skilled nursing facilities and assisted living facilities in the states of Arkansas, Georgia, North Carolina, Ohio, Oklahoma, and South Carolina. The company has a P/E ratio of 75.75.

The average volume for AdCare Health Systems has been 26,700 shares per day over the past 30 days. AdCare Health Systems has a market cap of $60.3 million and is part of the health services industry. Shares are down 24.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

AdCare Health Systems

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, poor profit margins 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 when compared to that of the S&P 500 and the Health Care Providers & Services industry. The net income has significantly decreased by 93.1% when compared to the same quarter one year ago, falling from -$2.64 million to -$5.09 million.
  • The debt-to-equity ratio is very high at 3.14 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, ADK maintains a poor quick ratio of 0.78, which illustrates the inability to avoid short-term cash problems.
  • Net operating cash flow has significantly decreased to -$8.07 million or 203.11% 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 gross profit margin for ADCARE HEALTH SYSTEMS INC is rather low; currently it is at 19.43%. Regardless of ADK's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, ADK's net profit margin of -21.83% significantly underperformed when compared to the industry average.
  • ADK's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 25.59%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

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