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."

Ladder Capital

Dividend Yield: 7.10%

Ladder Capital

(NYSE:

LADR

) shares currently have a dividend yield of 7.10%.

Ladder Capital Corp operates as a real estate investment trust in the United States. The company operates through three segments: Loans, Securities, and Real Estate. The company has a P/E ratio of 12.48.

The average volume for Ladder Capital has been 154,700 shares per day over the past 30 days. Ladder Capital has a market cap of $863.0 million and is part of the real estate industry. Shares are down 21.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Ladder Capital

as a

sell

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

Highlights from the ratings report include:

  • Net operating cash flow has significantly decreased to -$168.86 million or 241.50% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • LADR has underperformed the S&P 500 Index, declining 17.20% from its price level of one year ago. 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.
  • LADR, with its decline in revenue, underperformed when compared the industry average of 9.7%. Since the same quarter one year prior, revenues slightly dropped by 2.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, LADDER CAPITAL CORP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for LADDER CAPITAL CORP is currently very high, coming in at 71.06%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 28.79% trails the industry average.

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JAVELIN Mortgage Investment

Dividend Yield: 16.40%

JAVELIN Mortgage Investment

(NYSE:

JMI

) shares currently have a dividend yield of 16.40%.

JAVELIN Mortgage Investment Corp., a real estate investment trust (REIT), invests primarily in fixed rate agency, and fixed rate and hybrid adjustable rate non-agency residential mortgage-backed securities in the United States. The company qualifies as a REIT for federal income tax purposes.

The average volume for JAVELIN Mortgage Investment has been 59,400 shares per day over the past 30 days. JAVELIN Mortgage Investment has a market cap of $78.7 million and is part of the real estate industry. Shares are down 36.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

JAVELIN Mortgage Investment

as a

sell

. The area that we feel has been the company's primary weakness has been its meager revenue growth.

Highlights from the ratings report include:

  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, JAVELIN MORTGAGE INVESTMENT's return on equity significantly trails that of both the industry average and the S&P 500.
  • The revenue fell significantly faster than the industry average of 9.7%. Since the same quarter one year prior, revenues fell by 35.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Compared to where it was trading one year ago, JMI is down 49.30% to its most recent closing price of 6.44. Looking ahead, our view is that this stock still does not have good upside potential and may even suffer further declines.
  • The gross profit margin for JAVELIN MORTGAGE INVESTMENT is currently very high, coming in at 80.25%. Regardless of JMI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, JMI's net profit margin of 194.48% significantly outperformed against the industry.
  • Net operating cash flow has significantly increased by 69.81% to $4.17 million when compared to the same quarter last year. In addition, JAVELIN MORTGAGE INVESTMENT has also vastly surpassed the industry average cash flow growth rate of 16.11%.

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Independence Realty

Dividend Yield: 9.20%

Independence Realty

(AMEX:

IRT

) shares currently have a dividend yield of 9.20%.

Independence Realty Trust, Inc is an equity real estate investment trust launched by RAIT Financial Trust. It is managed by Independence Realty Advisors, LLC. The fund invests in the real estate markets of the United States. It makes investments in apartment properties to create its portfolio.

The average volume for Independence Realty has been 195,000 shares per day over the past 30 days. Independence Realty has a market cap of $249.0 million and is part of the real estate industry. Shares are down 17.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Independence Realty

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • IRT'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 25.03%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, INDEPENDENCE REALTY TRUST's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for INDEPENDENCE REALTY TRUST is rather low; currently it is at 20.30%. Regardless of IRT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, IRT's net profit margin of 1.47% is significantly lower than the industry average.
  • INDEPENDENCE REALTY TRUST reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, INDEPENDENCE REALTY TRUST increased its bottom line by earning $0.19 versus $0.06 in the prior year. For the next year, the market is expecting a contraction of 173.7% in earnings (-$0.14 versus $0.19).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 363.3% when compared to the same quarter one year prior, rising from -$0.13 million to $0.34 million.

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