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." Quad/GraphicsDividend Yield: 9.60%Quad/Graphics (NYSE: QUAD) shares currently have a dividend yield of 9.60%. Quad/Graphics, Inc., together with its subsidiaries, provides print and media solutions in the United States, Europe, Latin America, and internationally. The company operates in two segments, United States Print and Related Services; and International. The average volume for Quad/Graphics has been 271,000 shares per day over the past 30 days. Quad/Graphics has a market cap of $626.6 million and is part of the diversified services industry. Shares are up 32% year-to-date as of the close of trading on Tuesday. 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 Quad/Graphics 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, poor profit margins and weak operating cash flow. 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 Commercial Services & Supplies industry. The net income has significantly decreased by 136.4% when compared to the same quarter one year ago, falling from $25.80 million to -$9.40 million.
  • The debt-to-equity ratio is very high at 3.18 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, QUAD maintains a poor quick ratio of 0.83, which illustrates the inability to avoid short-term cash problems.
  • 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 Commercial Services & Supplies industry and the overall market, QUAD/GRAPHICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for QUAD/GRAPHICS INC is rather low; currently it is at 20.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.70% trails that of the industry average.
  • Net operating cash flow has decreased to $168.90 million or 22.66% 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.

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Cherry Hill Mortgage Investment

Dividend Yield: 13.70%

Cherry Hill Mortgage Investment

(NYSE:

CHMI

) shares currently have a dividend yield of 13.70%. Cherry Hill Mortgage Investment Corporation, a residential real estate finance company, acquires, invests in, and manages residential mortgage assets in the United States. The company has a P/E ratio of 34.10. The average volume for Cherry Hill Mortgage Investment has been 17,700 shares per day over the past 30 days. Cherry Hill Mortgage Investment has a market cap of $107.7 million and is part of the real estate industry. Shares are up 9.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Cherry Hill Mortgage Investment

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:

  • CHMI has underperformed the S&P 500 Index, declining 18.41% from its price level of one year ago. 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, CHERRY HILL MTG INVST's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for CHERRY HILL MTG INVST is currently very high, coming in at 81.74%. It has increased significantly from the same period last year. Along with this, the net profit margin of 97.05% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 115.42% to $7.40 million when compared to the same quarter last year. In addition, CHERRY HILL MTG INVST has also vastly surpassed the industry average cash flow growth rate of -64.29%.

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QIWI

Dividend Yield: 17.30%

QIWI

(NASDAQ:

QIWI

) shares currently have a dividend yield of 17.30%. Qiwi plc, together with its subsidiaries, operates electronic online payment systems primarily in the Russian Federation, Kazakhstan, Moldova, Belarus, Romania, and the United Arab Emirates. The company has a P/E ratio of 9.39. The average volume for QIWI has been 411,900 shares per day over the past 30 days. QIWI has a market cap of $697.8 million and is part of the financial services industry. Shares are down 38.7% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

QIWI

as a

sell

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

  • Net operating cash flow has decreased to $72.28 million or 31.39% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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. In comparison to other companies in the IT Services industry and the overall market on the basis of return on equity, QIWI PLC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • Looking at the price performance of QIWI's shares over the past 12 months, there is not much good news to report: the stock is down 55.14%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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 exceeded that of the S&P 500, but is less than that of the IT Services industry average. The net income has decreased by 11.8% when compared to the same quarter one year ago, dropping from $12.89 million to $11.37 million.
  • QIWI PLC's earnings per share declined by 25.0% in the most recent quarter compared to 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, QIWI PLC reported lower earnings of $1.22 versus $1.65 in the prior year. This year, the market expects an improvement in earnings ($74.01 versus $1.22).

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