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."

General Cable

Dividend Yield: 7.10%

General Cable

(NYSE:

BGC

) shares currently have a dividend yield of 7.10%.

General Cable Corporation designs, develops, manufactures, markets, and distributes copper, aluminum, and fiber optic wire and cable products for the energy, industrial, construction, and specialty and communications markets worldwide.

The average volume for General Cable has been 679,900 shares per day over the past 30 days. General Cable has a market cap of $500.7 million and is part of the industrial industry. Shares are down 26% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

General Cable

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The debt-to-equity ratio is very high at 4.73 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, BGC maintains a poor quick ratio of 0.81, which illustrates the inability to avoid short-term cash problems.
  • The gross profit margin for GENERAL CABLE CORP/DE is currently extremely low, coming in at 6.44%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -5.24% is significantly below that of the industry average.
  • BGC'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 34.26%, 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 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. Compared to other companies in the Electrical Equipment industry and the overall market, GENERAL CABLE CORP/DE's return on equity significantly trails that of both the industry average and the S&P 500.
  • BGC, with its decline in revenue, underperformed when compared the industry average of 21.2%. Since the same quarter one year prior, revenues fell by 41.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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World Point Terminals

Dividend Yield: 8.50%

World Point Terminals

(NYSE:

WPT

) shares currently have a dividend yield of 8.50%.

World Point Terminals, LP owns, operates, develops, and acquires terminals and other assets for the storage of light refined products, heavy refined products, and crude oil in the East Coast, Gulf Coast, and Midwest regions of the United States. The company has a P/E ratio of 15.49.

The average volume for World Point Terminals has been 29,900 shares per day over the past 30 days. World Point Terminals has a market cap of $491.5 million and is part of the energy industry. Shares are up 5.4% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

World Point Terminals

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 feeble growth in its earnings per share.

Highlights from the ratings report include:

  • Looking at the price performance of WPT's shares over the past 12 months, there is not much good news to report: the stock is down 28.33%, 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. 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.
  • WORLD POINT TERMINALS's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WORLD POINT TERMINALS increased its bottom line by earning $0.98 versus $0.76 in the prior year. For the next year, the market is expecting a contraction of 6.1% in earnings ($0.92 versus $0.98).
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 16.1% when compared to the same quarter one year ago, dropping from $8.33 million to $6.99 million.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, WORLD POINT TERMINALS's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • Despite the weak revenue results, WPT has significantly outperformed against the industry average of 34.5%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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JAVELIN Mortgage Investment

Dividend Yield: 15.00%

JAVELIN Mortgage Investment

(NYSE:

JMI

) shares currently have a dividend yield of 15.00%.

JAVELIN Mortgage Investment Corp., a real estate investment trust (REIT), invests primarily in fixed rate agency, and fixed rate and hybrid adjustable rate non-agency residential mortgage-backed securities in the United States. The company qualifies as a REIT for federal income tax purposes.

The average volume for JAVELIN Mortgage Investment has been 116,600 shares per day over the past 30 days. JAVELIN Mortgage Investment has a market cap of $85.9 million and is part of the real estate industry. Shares are up 14.7% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

JAVELIN Mortgage Investment

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 351.5% when compared to the same quarter one year ago, falling from $6.57 million to -$16.53 million.
  • Net operating cash flow has decreased to $6.79 million or 14.01% 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.
  • The share price of JAVELIN MORTGAGE INVESTMENT has not done very well: it is down 20.95% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, JAVELIN MORTGAGE INVESTMENT's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for JAVELIN MORTGAGE INVESTMENT is currently very high, coming in at 72.52%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, JMI's net profit margin of -247.27% significantly underperformed when compared to the industry average.

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