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: 8.80%

Harte-Hanks

(NYSE:

HHS

) shares currently have a dividend yield of 8.80%.

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 332,100 shares per day over the past 30 days. Harte-Hanks has a market cap of $236.4 million and is part of the media industry. Shares are down 53% 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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SunCoke Energy

Dividend Yield: 16.30%

SunCoke Energy

(NYSE:

SXC

) shares currently have a dividend yield of 16.30%.

SunCoke Energy, Inc. operates as an independent producer of coke in the Americas. The company offers metallurgical and thermal coal for use as a raw material in the blast furnace steelmaking process. It also provides coal handling and blending services.

The average volume for SunCoke Energy has been 1,170,000 shares per day over the past 30 days. SunCoke Energy has a market cap of $236.1 million and is part of the metals & mining industry. Shares are down 81.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

SunCoke Energy

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 high debt management risk.

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 Metals & Mining industry. The net income has significantly decreased by 552.8% when compared to the same quarter one year ago, falling from -$3.60 million to -$23.50 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 Metals & Mining industry and the overall market, SUNCOKE ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for SUNCOKE ENERGY INC is rather low; currently it is at 20.96%. It has decreased from the same quarter the previous year.
  • Net operating cash flow has significantly decreased to $6.40 million or 80.66% 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 debt-to-equity ratio is very high at 3.56 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, SXC's quick ratio is somewhat strong at 1.14, demonstrating the ability to handle short-term liquidity needs.

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Transocean Partners

Dividend Yield: 13.60%

Transocean Partners

(NYSE:

RIGP

) shares currently have a dividend yield of 13.60%.

Transocean Partners LLC, together with its subsidiaries, acquires, owns, and operates offshore drilling rigs located in the United States Gulf of Mexico. As of February 17, 2015, the company's fleet consisted of one ultra-deepwater semisubmersible rig and two ultra-deepwater drillships.

The average volume for Transocean Partners has been 122,300 shares per day over the past 30 days. Transocean Partners has a market cap of $440.7 million and is part of the energy industry. Shares are down 28% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Transocean Partners

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 and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • TRANSOCEAN PARTNERS LLC 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. For the next year, the market is expecting a contraction of 0.8% in earnings ($1.24 versus $1.25).
  • 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 Energy Equipment & Services industry. The net income has significantly decreased by 443.6% when compared to the same quarter one year ago, falling from $39.00 million to -$134.00 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 40.84%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 876.00% 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.
  • 41.60% is the gross profit margin for TRANSOCEAN PARTNERS LLC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, RIGP's net profit margin of -107.20% significantly underperformed when compared to the industry average.
  • Despite the weak revenue results, RIGP has outperformed against the industry average of 30.8%. Since the same quarter one year prior, revenues slightly dropped by 8.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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