Skip to main content

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: 13.30%

Overseas Shipholding Group

(AMEX:

OSGB

) shares currently have a dividend yield of 13.30%.

Overseas Shipholding Group, Inc. primarily engages in the ocean transportation of crude oil and petroleum products. The company has a P/E ratio of 4.90.

The average volume for Overseas Shipholding Group has been 35,600 shares per day over the past 30 days. Overseas Shipholding Group has a market cap of $893.5 million and is part of the transportation industry. Shares are down 26.3% year-to-date as of the close of trading on Friday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates

Overseas Shipholding Group

as a

sell

. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • OSGB'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 35.31%, 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. 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.
  • OSGB's debt-to-equity ratio of 1.00 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 5.31 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.
  • The gross profit margin for OVERSEAS SHIPHOLDING GROUP is rather high; currently it is at 54.25%. It has increased significantly from the same period last year. Along with this, the net profit margin of 71.70% significantly outperformed against the industry average.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Westlake Chemical Partners

Dividend Yield: 7.10%

Westlake Chemical Partners

(NYSE:

WLKP

) shares currently have a dividend yield of 7.10%.

Westlake Chemical Partners LP focuses on producing and selling ethylene. It also sells ethylene co-products, including propylene, crude butadiene, pyrolysis gasoline, and hydrogen directly to third parties on either a spot or contract basis. The company has a P/E ratio of 11.88.

The average volume for Westlake Chemical Partners has been 132,500 shares per day over the past 30 days. Westlake Chemical Partners has a market cap of $472.5 million and is part of the chemicals industry. Shares are down 21.9% year-to-date as of the close of trading on Friday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates

TheStreet Recommends

Westlake Chemical Partners

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 generally high debt management risk.

Highlights from the ratings report include:

  • WLKP'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 36.28%, 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. 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 debt-to-equity ratio is very high at 3.98 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 3.83, which shows the ability to cover short-term cash needs.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.8%. Since the same quarter one year prior, revenues slightly dropped by 9.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • WESTLAKE CHEMICAL PRTNRS LP has improved earnings per share by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, WESTLAKE CHEMICAL PRTNRS LP reported lower earnings of $1.47 versus $6.58 in the prior year. This year, the market expects an improvement in earnings ($1.58 versus $1.47).
  • 47.71% is the gross profit margin for WESTLAKE CHEMICAL PRTNRS LP which we consider to be strong. 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 4.33% trails the industry average.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Nordic American Offshore

Dividend Yield: 9.40%

Nordic American Offshore

(NYSE:

NAO

) shares currently have a dividend yield of 9.40%.

Nordic American Offshore Ltd. owns and operates platform supply vessels in the North Sea. It owns and operates eight vessels. The company was founded in 2013 and is based in Hamilton, Bermuda.

The average volume for Nordic American Offshore has been 161,400 shares per day over the past 30 days. Nordic American Offshore has a market cap of $115.1 million and is part of the transportation industry. Shares are down 2.9% year-to-date as of the close of trading on Friday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreet Ratings rates

Nordic American Offshore

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, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • NORDIC AMERICAN OFFSHORE 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, NORDIC AMERICAN OFFSHORE swung to a loss, reporting -$0.46 versus $0.31 in the prior year. For the next year, the market is expecting a contraction of 47.0% in earnings (-$0.68 versus -$0.46).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, NORDIC AMERICAN OFFSHORE underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for NORDIC AMERICAN OFFSHORE is currently extremely low, coming in at 14.53%. It has decreased significantly from the same period last year.
  • Net operating cash flow has significantly decreased to -$1.64 million or 125.48% 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 43.09%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 171.42% 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.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Other helpful dividend tools from TheStreet: