Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer

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."

Baytex Energy

Dividend Yield: 5.20%

Baytex Energy

(NYSE:

BTE

) shares currently have a dividend yield of 5.20%.

Baytex Energy Corp., an oil and gas company, engages in the acquisition, development, exploitation, and production of oil and natural gas in the Western Canadian Sedimentary Basin and the United States. The company offers heavy oil, light oil, condensate, and natural gas liquids.

The average volume for Baytex Energy has been 1,126,800 shares per day over the past 30 days. Baytex Energy has a market cap of $3.2 billion and is part of the energy industry. Shares are up 15.4% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Baytex Energy

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 and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • BAYTEX ENERGY CORP 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. During the past fiscal year, BAYTEX ENERGY CORP swung to a loss, reporting -$0.65 versus $1.32 in the prior year.
  • 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 1260.7% when compared to the same quarter one year ago, falling from $31.17 million to -$361.82 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, BAYTEX ENERGY CORP's return on equity significantly trails that of both the industry average and 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 55.69%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 964.00% 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.82, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.44 is very weak and demonstrates a lack of ability to pay short-term obligations.

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Artisan Partners Asset Management

Dividend Yield: 5.30%

Artisan Partners Asset Management

(NYSE:

APAM

) shares currently have a dividend yield of 5.30%.

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 average volume for Artisan Partners Asset Management has been 319,000 shares per day over the past 30 days. Artisan Partners Asset Management has a market cap of $1.8 billion and is part of the financial services industry. Shares are down 10.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Artisan Partners Asset Management

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:

  • APAM has underperformed the S&P 500 Index, declining 17.89% 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.
  • 38.28% is the gross profit margin for ARTISAN PARTNERS ASSET MGMT which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 10.33% trails the industry average.
  • Net operating cash flow has significantly increased by 1386.85% to $71.96 million when compared to the same quarter last year. In addition, ARTISAN PARTNERS ASSET MGMT has also vastly surpassed the industry average cash flow growth rate of -22.85%.
  • 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 Capital Markets industry and the overall market, ARTISAN PARTNERS ASSET MGMT's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • ARTISAN PARTNERS ASSET MGMT reported significant earnings per share improvement 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, ARTISAN PARTNERS ASSET MGMT continued to lose money by earning -$0.72 versus -$2.02 in the prior year. This year, the market expects an improvement in earnings ($3.00 versus -$0.72).

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New Residential Investment

Dividend Yield: 9.10%

New Residential Investment

(NYSE:

NRZ

) shares currently have a dividend yield of 9.10%.

New Residential Investment Corp., a real estate investment trust (REIT), focuses on investing in and managing residential mortgage related assets. It operates through Servicing Related Assets, Residential Securities and Loans, and Other Investments segments. The company has a P/E ratio of 6.61.

The average volume for New Residential Investment has been 2,292,200 shares per day over the past 30 days. New Residential Investment has a market cap of $2.4 billion and is part of the real estate industry. Shares are up 31.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

New Residential Investment

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income 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 underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Real Estate Investment Trusts (REITs) industry average. The net income has significantly decreased by 32.6% when compared to the same quarter one year ago, falling from $80.51 million to $54.23 million.
  • NEW RESIDENTIAL INV CP's earnings per share declined by 40.3% 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, NEW RESIDENTIAL INV CP increased its bottom line by earning $2.51 versus $1.96 in the prior year. For the next year, the market is expecting a contraction of 21.9% in earnings ($1.96 versus $2.51).
  • The gross profit margin for NEW RESIDENTIAL INV CP is rather high; currently it is at 65.51%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, NRZ's net profit margin of 46.56% significantly outperformed against the industry.
  • Net operating cash flow has significantly increased by 78.98% to $86.56 million when compared to the same quarter last year. In addition, NEW RESIDENTIAL INV CP has also vastly surpassed the industry average cash flow growth rate of 12.85%.

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