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 Refining Logistics

Dividend Yield: 7.20%

Western Refining Logistics

(NYSE:

WNRL

) shares currently have a dividend yield of 7.20%.

Western Refining Logistics, LP engages in the ownership, acquisition, development, and operation of terminals, storage tanks, pipelines, and other logistics assets in the Southwestern United States. The company has a P/E ratio of 14.99.

The average volume for Western Refining Logistics has been 123,200 shares per day over the past 30 days. Western Refining Logistics has a market cap of $520.2 million and is part of the energy industry. Shares are down 20.6% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Western Refining Logistics

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:

  • WNRL has underperformed the S&P 500 Index, declining 15.71% 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.
  • The gross profit margin for WESTERN REFINING LGS LP is currently extremely low, coming in at 4.92%. Regardless of WNRL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, WNRL's net profit margin of 2.44% compares favorably to the industry average.
  • Despite the weak revenue results, WNRL has outperformed against the industry average of 36.8%. Since the same quarter one year prior, revenues fell by 26.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has slightly increased to $17.69 million or 7.23% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -26.82%.
  • WESTERN REFINING LGS LP has improved earnings per share by 29.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, WESTERN REFINING LGS LP turned its bottom line around by earning $1.16 versus -$0.91 in the prior year. This year, the market expects an improvement in earnings ($1.43 versus $1.16).

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Enable Midstream Partners

Dividend Yield: 16.30%

Enable Midstream Partners

(NYSE:

ENBL

) shares currently have a dividend yield of 16.30%.

Enable Midstream Partners, LP owns, operates, and develops natural gas and crude oil infrastructure assets in the United States. It operates through two segments, Gathering and Processing, and Transportation and Storage.

The average volume for Enable Midstream Partners has been 327,100 shares per day over the past 30 days. Enable Midstream Partners has a market cap of $1.7 billion and is part of the energy industry. Shares are down 23.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Enable Midstream Partners

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally high debt management risk.

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 808.6% when compared to the same quarter one year ago, falling from $139.00 million to -$985.00 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, ENABLE MIDSTREAM PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ENABLE MIDSTREAM PARTNERS LP is currently lower than what is desirable, coming in at 33.13%. Regardless of ENBL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, ENBL's net profit margin of -152.47% significantly underperformed when compared to the industry average.
  • Net operating cash flow has decreased to $207.00 million or 23.04% when compared to the same quarter last year. Despite a decrease in cash flow of 23.04%, ENABLE MIDSTREAM PARTNERS LP is in line with the industry average cash flow growth rate of -26.82%.
  • Despite currently having a low debt-to-equity ratio of 0.42, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.40 is very low and demonstrates very weak liquidity.

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Arc Logistics Partners

Dividend Yield: 17.90%

Arc Logistics Partners

(NYSE:

ARCX

) shares currently have a dividend yield of 17.90%.

Arc Logistics Partners LP engages in the terminalling, storage, throughput, and transloading of crude oil and petroleum products.

The average volume for Arc Logistics Partners has been 28,900 shares per day over the past 30 days. Arc Logistics Partners has a market cap of $129.8 million and is part of the energy industry. Shares are down 28.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Arc Logistics Partners

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, ARC LOGISTICS PARTNERS LP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • ARCX'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 33.53%, 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. 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.
  • ARCX's debt-to-equity ratio of 0.73 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. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.08 is sturdy.
  • ARC LOGISTICS PARTNERS LP has improved earnings per share by 9.1% 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, ARC LOGISTICS PARTNERS LP reported lower earnings of $0.06 versus $0.13 in the prior year. This year, the market expects an improvement in earnings ($0.43 versus $0.06).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 22.2% when compared to the same quarter one year prior, going from $1.64 million to $2.00 million.

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