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."

Hugoton Royalty

Dividend Yield: 13.70%

Hugoton Royalty

(NYSE:

HGT

) shares currently have a dividend yield of 13.70%.

Hugoton Royalty Trust operates as an express trust in the United States. The company holds an 80% net profits interests in certain natural gas producing working interest properties of XTO Energy Inc. XTO Energy Inc. The company has a P/E ratio of 1.69.

The average volume for Hugoton Royalty has been 114,800 shares per day over the past 30 days. Hugoton Royalty has a market cap of $72.4 million and is part of the energy industry. Shares are down 79.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Hugoton Royalty

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 deteriorating net income.

Highlights from the ratings report include:

  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 79.47%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 84.00% 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.
  • The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 86.7% when compared to the same quarter one year ago, falling from $10.14 million to $1.35 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, HUGOTON ROYALTY TRUST's return on equity exceeds that of both the industry average and the S&P 500.
  • HGT, with its very weak revenue results, has greatly underperformed against the industry average of 36.8%. Since the same quarter one year prior, revenues plummeted by 84.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • HUGOTON ROYALTY TRUST 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. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, HUGOTON ROYALTY TRUST increased its bottom line by earning $1.09 versus $0.87 in the prior year.

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MVC Capital

Dividend Yield: 7.30%

MVC Capital

(NYSE:

MVC

) shares currently have a dividend yield of 7.30%.

MVC Capital, Inc. The company has a P/E ratio of 30.71.

The average volume for MVC Capital has been 61,000 shares per day over the past 30 days. MVC Capital has a market cap of $167.3 million and is part of the financial services industry. Shares are down 25.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

TheStreet Recommends

MVC Capital

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, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • MVC CAPITAL INC 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 suffered a declining pattern earnings per share over the past two years. During the past fiscal year, MVC CAPITAL INC swung to a loss, reporting -$0.88 versus $0.82 in the prior year.
  • 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 345.8% when compared to the same quarter one year ago, falling from $4.32 million to -$10.61 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, MVC CAPITAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$108.75 million or 534.23% 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 share price of MVC CAPITAL INC has not done very well: it is down 22.32% 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.

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Navios Maritime Midstream Partners

Dividend Yield: 17.00%

Navios Maritime Midstream Partners

(NYSE:

NAP

) shares currently have a dividend yield of 17.00%.

Navios Maritime Midstream Partners L.P. owns and operates very large crude oil (VLCC) tankers under long-term contracts with international oil companies, refiners, and large vessel operators. As of December 31, 2014, it owned four VLCC tanker vessels. The company has a P/E ratio of 76.31.

The average volume for Navios Maritime Midstream Partners has been 67,800 shares per day over the past 30 days. Navios Maritime Midstream Partners has a market cap of $92.7 million and is part of the transportation industry. Shares are down 15.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Navios Maritime Midstream Partners

as a

sell

. The area that we feel has been the company's primary weakness has been its generally higher debt management risk.

Highlights from the ratings report include:

  • NAP's debt-to-equity ratio of 0.71 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 8.75 is very high and demonstrates very strong liquidity.
  • Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, NAVIOS MARITIME MIDSTR PN LP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The gross profit margin for NAVIOS MARITIME MIDSTR PN LP is currently very high, coming in at 97.24%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.73% significantly outperformed against the industry average.
  • Net operating cash flow has improved to $6.39 million from having none in the same quarter last year. Since the company had no net operating cash flow for the prior period, we cannot calculate a percent change in order to compare its growth rate with that of its industry average.
  • This stock's share value has moved by only 28.02% over the past year.

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