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: 10.60%

Harte-Hanks

(NYSE:

HHS

) shares currently have a dividend yield of 10.60%.

Harte-Hanks, Inc. provides various 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 306,400 shares per day over the past 30 days. Harte-Hanks has a market cap of $196.6 million and is part of the media industry. Shares are up 5.6% year-to-date as of the close of trading on Friday.

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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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • HARTE HANKS 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. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, HARTE HANKS INC reported lower earnings of $0.38 versus $0.39 in the prior year. For the next year, the market is expecting a contraction of 31.6% in earnings ($0.26 versus $0.38).
  • 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 2762.2% when compared to the same quarter one year ago, falling from $6.42 million to -$170.92 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 17.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -140.13% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $2.22 million or 63.88% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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National American University Holdings

Dividend Yield: 8.90%

National American University Holdings

(NASDAQ:

NAUH

) shares currently have a dividend yield of 8.90%.

National American University Holdings, Inc. owns and operates National American University (NAU) that provides postsecondary education services primarily for working adults and other non-traditional students in the United States. The company operates through two segments, NAU and Other.

The average volume for National American University Holdings has been 27,900 shares per day over the past 30 days. National American University Holdings has a market cap of $48.7 million and is part of the diversified services industry. Shares are down 1.4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

National American University Holdings

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • 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 Diversified Consumer Services industry and the overall market, NATIONAL AMERN UNIV HLDG 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 -$4.26 million or 217.16% 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 33.99%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 145.45% 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 significantly exceeded that of the Diversified Consumer Services industry average, but is less than that of the S&P 500. The net income has significantly decreased by 141.7% when compared to the same quarter one year ago, falling from $2.83 million to -$1.18 million.
  • The revenue fell significantly faster than the industry average of 12.8%. Since the same quarter one year prior, revenues fell by 17.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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Archrock

Dividend Yield: 13.00%

Archrock

(NYSE:

AROC

) shares currently have a dividend yield of 13.00%.

Archrock, Inc. provides natural gas contract compression services to customers in the oil and natural gas industry in the United States.

The average volume for Archrock has been 941,500 shares per day over the past 30 days. Archrock has a market cap of $402.1 million and is part of the energy industry. Shares are down 20.2% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Archrock

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, disappointing return on equity, weak operating cash flow, generally high debt management risk and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • ARCHROCK 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, ARCHROCK INC reported lower earnings of $0.36 versus $0.89 in the prior year. For the next year, the market is expecting a contraction of 22.2% in earnings ($0.28 versus $0.36).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, ARCHROCK 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 $128.49 million or 18.42% when compared to the same quarter last year. Despite a decrease in cash flow ARCHROCK INC is still fairing well by exceeding its industry average cash flow growth rate of -39.84%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 65.31%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 260.86% 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.
  • The debt-to-equity ratio of 1.14 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, AROC's quick ratio is somewhat strong at 1.13, demonstrating the ability to handle short-term liquidity needs.

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