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."

VEREIT

Dividend Yield: 7.30%

VEREIT

(NASDAQ:

VER

) shares currently have a dividend yield of 7.30%.

VEREIT, Inc. is a publicly owned real estate investment trust. It owns and acquires single tenant, freestanding commercial real estate that is net leased on a medium-term basis, primarily to investment grade credit rated and other creditworthy tenants.

The average volume for VEREIT has been 5,987,500 shares per day over the past 30 days. VEREIT has a market cap of $6.8 billion and is part of the real estate industry. Shares are down 4.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

VEREIT

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 decreased to $177.35 million or 24.19% 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.
  • VER has underperformed the S&P 500 Index, declining 22.83% 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.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, VEREIT INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • VER, with its decline in revenue, underperformed when compared the industry average of 6.1%. Since the same quarter one year prior, revenues fell by 15.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 37.53% is the gross profit margin for VEREIT INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, VER's net profit margin of 1.95% significantly trails the industry average.

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Golar LNG

Dividend Yield: 10.20%

Golar LNG

(NASDAQ:

GLNG

) shares currently have a dividend yield of 10.20%.

Golar LNG Limited, a midstream liquefied natural gas (LNG) company, engages in the transportation, regasification, liquefaction, and trading of LNG. The company operates in three segments: Vessel Operations, LNG Trading, and FLNG. The company has a P/E ratio of 11.01.

The average volume for Golar LNG has been 2,430,600 shares per day over the past 30 days. Golar LNG has a market cap of $1.6 billion and is part of the transportation industry. Shares are up 11.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Golar LNG

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:

  • GOLAR LNG LTD 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 two years. We anticipate that this should continue in the coming year. During the past fiscal year, GOLAR LNG LTD swung to a loss, reporting -$0.50 versus $1.58 in the prior year. For the next year, the market is expecting a contraction of 216.0% in earnings (-$1.58 versus -$0.50).
  • 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 1980.8% when compared to the same quarter one year ago, falling from $7.77 million to -$146.12 million.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, GOLAR LNG LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for GOLAR LNG LTD is currently extremely low, coming in at 5.39%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -533.72% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$15.38 million or 181.07% 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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WP Glimcher

Dividend Yield: 10.60%

WP Glimcher

(NYSE:

WPG

) shares currently have a dividend yield of 10.60%.

Washington Prime Group Inc. (NYSE:WPG.WI) operates independently of Simon Property Group Inc. as of May 28, 2014. The company has a P/E ratio of 45.75.

The average volume for WP Glimcher has been 1,404,700 shares per day over the past 30 days. WP Glimcher has a market cap of $1.8 billion and is part of the real estate industry. Shares are down 10.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

WP Glimcher

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, feeble growth in its earnings per share, deteriorating net income and poor profit margins.

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 47.80%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 90.47% 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.
  • WP GLIMCHER 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. For the next year, the market is expecting a contraction of 97.3% in earnings ($0.03 versus $1.10).
  • 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 76.5% when compared to the same quarter one year ago, falling from $32.20 million to $7.57 million.
  • The gross profit margin for WP GLIMCHER INC is currently lower than what is desirable, coming in at 25.75%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 3.48% significantly trails the industry average.
  • Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, WP GLIMCHER INC's return on equity significantly trails that of both the industry average and the S&P 500.

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