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."

Overseas Shipholding Group

Dividend Yield: 14.20%

Overseas Shipholding Group

(AMEX:

OSGB

) shares currently have a dividend yield of 14.20%.

Overseas Shipholding Group, Inc. primarily engages in the ocean transportation of crude oil and petroleum products. The company has a P/E ratio of 4.61.

The average volume for Overseas Shipholding Group has been 61,600 shares per day over the past 30 days. Overseas Shipholding Group has a market cap of $841.4 million and is part of the transportation industry. Shares are down 30.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Overseas Shipholding Group

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 feeble growth in its earnings per share.

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 34.82%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 60.00% 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.
  • OVERSEAS SHIPHOLDING GROUP 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 reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, OVERSEAS SHIPHOLDING GROUP turned its bottom line around by earning $0.54 versus -$6.12 in the prior year. For the next year, the market is expecting a contraction of 44.4% in earnings ($0.30 versus $0.54).
  • The change in net income from the same quarter one year ago has significantly 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 65.1% when compared to the same quarter one year ago, falling from $26.53 million to $9.27 million.
  • OSGB's debt-to-equity ratio of 0.84 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 3.91 is very high and demonstrates very strong liquidity.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, OVERSEAS SHIPHOLDING GROUP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.

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AG Mortgage Investment

Dividend Yield: 14.20%

AG Mortgage Investment

(NYSE:

MITT

) shares currently have a dividend yield of 14.20%.

AG Mortgage Investment Trust, Inc., a real estate investment trust, focuses on investing in, acquiring, and managing a portfolio of residential mortgage assets, other real estate-related securities, and financial assets. The company has a P/E ratio of 1340.00.

The average volume for AG Mortgage Investment has been 201,400 shares per day over the past 30 days. AG Mortgage Investment has a market cap of $379.1 million and is part of the real estate industry. Shares are up 5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

TheStreet Recommends

AG Mortgage Investment

as a

sell

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

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 31.14%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 135.00% compared to the year-earlier 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, 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 103.3% when compared to the same quarter one year ago, falling from $14.66 million to -$0.49 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, AG MORTGAGE INVESTMENT TRUST's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $18.03 million or 16.31% 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.
  • AG MORTGAGE INVESTMENT 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. 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, AG MORTGAGE INVESTMENT TRUST reported lower earnings of $0.01 versus $3.38 in the prior year. This year, the market expects an improvement in earnings ($2.03 versus $0.01).

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Blueknight Energy Partners

Dividend Yield: 10.90%

Blueknight Energy Partners

(NASDAQ:

BKEP

) shares currently have a dividend yield of 10.90%.

Blueknight Energy Partners, L.P. provides integrated terminalling, storage, processing, gathering, and transportation services for companies engaged in the production, distribution, and marketing of crude oil and asphalt products in the United States.

The average volume for Blueknight Energy Partners has been 48,300 shares per day over the past 30 days. Blueknight Energy Partners has a market cap of $176.0 million and is part of the energy industry. Shares are down 5.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Blueknight Energy Partners

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 291.9% when compared to the same quarter one year ago, falling from $8.79 million to -$16.86 million.
  • The debt-to-equity ratio is very high at 2.81 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, BKEP has a quick ratio of 0.51, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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, BLUEKNIGHT ENERGY PRTNRS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $17.34 million or 8.36% when compared to the same quarter last year. Despite a decrease in cash flow BLUEKNIGHT ENERGY PRTNRS LP is still fairing well by exceeding its industry average cash flow growth rate of -38.88%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 35.14%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 750.00% 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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