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."

Western Gas Partners

Dividend Yield: 8.60%

Western Gas Partners

(NYSE:

WES

) shares currently have a dividend yield of 8.60%.

Western Gas Partners, LP owns, operates, acquires, and develops midstream energy assets in the Rocky Mountains, the Mid-Continent, North-central Pennsylvania, and Texas.

The average volume for Western Gas Partners has been 817,500 shares per day over the past 30 days. Western Gas Partners has a market cap of $5.2 billion and is part of the energy industry. Shares are down 20.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Western Gas Partners

as a

sell

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

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 281.7% when compared to the same quarter one year ago, falling from $94.46 million to -$171.66 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 Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, WESTERN GAS PARTNERS LP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 47.16%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 480.95% 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.
  • WESTERN GAS PARTNERS LP 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 two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, WESTERN GAS PARTNERS LP swung to a loss, reporting -$1.96 versus $2.13 in the prior year. This year, the market expects an improvement in earnings ($1.75 versus -$1.96).
  • WES's debt-to-equity ratio of 0.85 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.

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Artisan Partners Asset Management

Dividend Yield: 8.70%

Artisan Partners Asset Management

(NYSE:

APAM

) shares currently have a dividend yield of 8.70%.

Artisan Partners Asset Management Inc is publicly owned investment manager. It provides its services to pension and profit sharing plans, trusts, endowments, foundations, charitable organizations, government entities, private funds and non-U.S. funds, as well as mutual funds, non-U.S. The company has a P/E ratio of 14.80.

The average volume for Artisan Partners Asset Management has been 482,900 shares per day over the past 30 days. Artisan Partners Asset Management has a market cap of $2.0 billion and is part of the financial services industry. Shares are down 22.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Artisan Partners Asset Management

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 poor profit margins.

Highlights from the ratings report include:

  • Looking at the price performance of APAM's shares over the past 12 months, there is not much good news to report: the stock is down 42.66%, 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. 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 gross profit margin for ARTISAN PARTNERS ASSET MGMT is currently lower than what is desirable, coming in at 34.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 10.46% trails that of the industry average.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income has decreased by 5.6% when compared to the same quarter one year ago, dropping from $21.29 million to $20.10 million.
  • APAM, with its decline in revenue, slightly underperformed the industry average of 4.2%. Since the same quarter one year prior, revenues slightly dropped by 6.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ARTISAN PARTNERS ASSET MGMT's earnings per share declined by 19.0% 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, ARTISAN PARTNERS ASSET MGMT turned its bottom line around by earning $1.84 versus -$0.72 in the prior year. This year, the market expects an improvement in earnings ($2.16 versus $1.84).

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Carlyle Group L P

Dividend Yield: 7.90%

Carlyle Group L P

(NASDAQ:

CG

) shares currently have a dividend yield of 7.90%.

The Carlyle Group LP is an investment firm specializing in direct and fund of fund investments.

The average volume for Carlyle Group L P has been 1,124,700 shares per day over the past 30 days. Carlyle Group L P has a market cap of $4.8 billion and is part of the financial services industry. Shares are down 3.3% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Carlyle Group L P

as a

sell

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

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 Capital Markets industry. The net income has significantly decreased by 117.8% when compared to the same quarter one year ago, falling from $16.30 million to -$2.90 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 Capital Markets industry and the overall market on the basis of return on equity, CARLYLE GROUP LP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 43.68%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 117.39% 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.
  • CARLYLE GROUP LP 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 two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CARLYLE GROUP LP swung to a loss, reporting -$0.27 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($1.39 versus -$0.27).
  • CG, with its decline in revenue, underperformed when compared the industry average of 4.2%. Since the same quarter one year prior, revenues fell by 14.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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