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."

EnLink Midstream

Dividend Yield: 6.60%

EnLink Midstream

(NYSE:

ENLC

) shares currently have a dividend yield of 6.60%.

EnLink Midstream, LLC engages in gathering, transmission, processing, and marketing of natural gas and natural gas liquids (NGLs), condensate, and crude oil in the United States.

The average volume for EnLink Midstream has been 572,900 shares per day over the past 30 days. EnLink Midstream has a market cap of $2.8 billion and is part of the energy industry. Shares are up 3% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

EnLink Midstream

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 2791.8% when compared to the same quarter one year ago, falling from $17.00 million to -$457.60 million.
  • Currently the debt-to-equity ratio of 1.59 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 0.20, which clearly demonstrates the inability to cover short-term cash needs.
  • 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, ENLINK MIDSTREAM LLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ENLINK MIDSTREAM LLC is rather low; currently it is at 19.15%. Regardless of ENLC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, ENLC's net profit margin of -51.43% significantly underperformed when compared to the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 53.23%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 2660.00% 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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General Cable

Dividend Yield: 5.20%

General Cable

(NYSE:

BGC

) shares currently have a dividend yield of 5.20%.

General Cable Corporation designs, develops, manufactures, markets, and distributes copper, aluminum, and fiber optic wire and cable products for the energy, industrial, construction, and specialty and communications markets worldwide.

The average volume for General Cable has been 762,000 shares per day over the past 30 days. General Cable has a market cap of $682.0 million and is part of the industrial industry. Shares are up 3.1% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

General Cable

as a

sell

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

Highlights from the ratings report include:

  • The debt-to-equity ratio is very high at 4.66 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, BGC maintains a poor quick ratio of 0.88, which illustrates the inability to avoid short-term cash problems.
  • Net operating cash flow has significantly decreased to -$40.60 million or 141.42% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • BGC'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 26.77%, 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.
  • The gross profit margin for GENERAL CABLE CORP/DE is currently extremely low, coming in at 14.33%. Regardless of BGC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -0.48% trails the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electrical Equipment industry and the overall market, GENERAL CABLE CORP/DE's return on equity significantly trails that of both the industry average and the S&P 500.

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Carlyle Group

Dividend Yield: 6.40%

Carlyle Group

(NASDAQ:

CG

) shares currently have a dividend yield of 6.40%.

The Carlyle Group LP is an investment firm specializing in direct and fund of fund investments.

The average volume for Carlyle Group has been 564,300 shares per day over the past 30 days. Carlyle Group has a market cap of $5.3 billion and is part of the financial services industry. Shares are up 4.1% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Carlyle Group

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 Capital Markets industry. The net income has significantly decreased by 78.7% when compared to the same quarter one year ago, falling from $39.50 million to $8.40 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 Capital Markets industry and the overall market, CARLYLE GROUP LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CARLYLE GROUP LP is rather low; currently it is at 19.09%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 1.73% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to $19.70 million or 98.66% when compared to the same quarter last year. Despite a decrease in cash flow of 98.66%, CARLYLE GROUP LP is still significantly exceeding the industry average of -198.91%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 46.33%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 98.14% 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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