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."

Harte-Hanks

Dividend Yield: 13.10%

Harte-Hanks

(NYSE:

HHS

) shares currently have a dividend yield of 13.10%.

Harte Hanks, Inc. provides various multichannel marketing services in the United States and internationally. The company operates in two segments, Customer Interaction and Trillium Software.

The average volume for Harte-Hanks has been 265,200 shares per day over the past 30 days. Harte-Hanks has a market cap of $159.3 million and is part of the media industry. Shares are down 22.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Harte-Hanks

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 Media industry. The net income has significantly decreased by 74.8% when compared to the same quarter one year ago, falling from $10.09 million to $2.54 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 Media industry and the overall market, HARTE HANKS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for HARTE HANKS INC is rather low; currently it is at 19.15%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.95% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to $1.70 million or 77.64% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 67.57%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 75.00% 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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Apollo Residential Mortgage

Dividend Yield: 14.40%

Apollo Residential Mortgage

(NYSE:

AMTG

) shares currently have a dividend yield of 14.40%.

Apollo Residential Mortgage, Inc. primarily invests in residential mortgage assets in the United States.

The average volume for Apollo Residential Mortgage has been 552,100 shares per day over the past 30 days. Apollo Residential Mortgage has a market cap of $423.3 million and is part of the real estate industry. Shares are up 11.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Apollo Residential Mortgage

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 109.0% when compared to the same quarter one year ago, falling from $13.29 million to -$1.19 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 Real Estate Investment Trusts (REITs) industry and the overall market, APOLLO RESIDENTIAL MTG 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 $13.42 million or 19.38% 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 share price of APOLLO RESIDENTIAL MTG INC has not done very well: it is down 15.87% 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.
  • APOLLO RESIDENTIAL MTG 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 reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, APOLLO RESIDENTIAL MTG INC swung to a loss, reporting -$0.82 versus $2.54 in the prior year. This year, the market expects an improvement in earnings ($1.95 versus -$0.82).

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Vermilion Energy

Dividend Yield: 7.30%

Vermilion Energy

(NYSE:

VET

) shares currently have a dividend yield of 7.30%.

Vermilion Energy Inc. acquires, explores, develops, and produces crude oil and natural gas in North America, Europe, and Australia.

The average volume for Vermilion Energy has been 81,000 shares per day over the past 30 days. Vermilion Energy has a market cap of $3.0 billion and is part of the energy industry. Shares are down 1.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Vermilion Energy

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 high debt management risk.

Highlights from the ratings report include:

  • VERMILION ENERGY 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 reported a trend of declining earnings per share over the past two years. During the past fiscal year, VERMILION ENERGY INC swung to a loss, reporting -$1.97 versus $2.53 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 342.3% when compared to the same quarter one year ago, falling from $58.64 million to -$142.08 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 on the basis of return on equity, VERMILION ENERGY INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Net operating cash flow has decreased to $164.86 million or 28.05% when compared to the same quarter last year. Despite a decrease in cash flow VERMILION ENERGY INC is still fairing well by exceeding its industry average cash flow growth rate of -39.13%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 30.57%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 337.03% 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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