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."

Fly Leasing

Dividend Yield: 7.50%

Fly Leasing

(NYSE:

FLY

) shares currently have a dividend yield of 7.50%.

FLY Leasing Limited, together with its subsidiaries, engages in purchasing and leasing commercial aircraft under multi-year contracts to various airlines worldwide.

The average volume for Fly Leasing has been 253,700 shares per day over the past 30 days. Fly Leasing has a market cap of $555.7 million and is part of the diversified services industry. Shares are up 4.4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Fly Leasing

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 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 significantly underperformed when compared to that of the S&P 500 and the Trading Companies & Distributors industry. The net income has significantly decreased by 368.8% when compared to the same quarter one year ago, falling from $21.67 million to -$58.26 million.
  • The debt-to-equity ratio is very high at 4.24 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Trading Companies & Distributors industry and the overall market, FLY LEASING LTD -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • FLY LEASING LTD -ADR 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FLY LEASING LTD -ADR reported lower earnings of $1.32 versus $1.67 in the prior year. This year, the market expects an improvement in earnings ($1.76 versus $1.32).
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

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GasLog Partners

Dividend Yield: 9.40%

GasLog Partners

(NYSE:

GLOP

) shares currently have a dividend yield of 9.40%.

GasLog Partners LP acquires, owns, and operates liquefied natural gas (LNG) carriers. The company provides LNG transportation services under long-term charters worldwide. As of February 16, 2015, it had a fleet of five LNG carriers. The company was founded in 2014 and is based in Monaco. The company has a P/E ratio of 10.36.

The average volume for GasLog Partners has been 172,700 shares per day over the past 30 days. GasLog Partners has a market cap of $404.6 million and is part of the transportation industry. Shares are down 27.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

GasLog Partners

as a

sell

. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • GLOP'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 45.20%, 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. 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.
  • In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, GASLOG PARTNERS LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for GASLOG PARTNERS LP is currently very high, coming in at 78.45%. Regardless of GLOP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GLOP's net profit margin of 38.29% significantly outperformed against the industry.
  • The debt-to-equity ratio is somewhat low, currently at 0.79, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 6.53, which clearly demonstrates the ability to cover short-term cash needs.
  • GASLOG PARTNERS LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($2.20 versus $1.48).

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Anworth Mortgage Asset

Dividend Yield: 12.00%

Anworth Mortgage Asset

(NYSE:

ANH

) shares currently have a dividend yield of 12.00%.

Anworth Mortgage Asset Corporation operates as a real estate investment trust in the United States. The company has a P/E ratio of 250.00.

The average volume for Anworth Mortgage Asset has been 812,500 shares per day over the past 30 days. Anworth Mortgage Asset has a market cap of $513.2 million and is part of the real estate industry. Shares are down 5.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Anworth Mortgage Asset

as a

sell

. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from the ratings report include:

  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ANWORTH MTG ASSET CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • After a year of stock price fluctuations, the net result is that ANH's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • ANH, with its decline in revenue, underperformed when compared the industry average of 9.8%. Since the same quarter one year prior, revenues fell by 17.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ANWORTH MTG ASSET CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ANWORTH MTG ASSET CORP reported lower earnings of $0.18 versus $0.49 in the prior year. This year, the market expects an improvement in earnings ($0.28 versus $0.18).
  • The gross profit margin for ANWORTH MTG ASSET CORP is currently very high, coming in at 90.15%. Regardless of ANH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ANH's net profit margin of 56.17% significantly outperformed against the industry.

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