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."

Cypress Energy Partners

Dividend Yield: 13.10%

Cypress Energy Partners

(NYSE:

CELP

) shares currently have a dividend yield of 13.10%.

Cypress Energy Partners, L.P. provides saltwater disposal (SWD), and other water and environmental services in North America. It operates in two segments: Water and Environmental Services (W&ES), and Pipeline Inspection and Integrity Services (PI&IS).

The average volume for Cypress Energy Partners has been 34,000 shares per day over the past 30 days. Cypress Energy Partners has a market cap of $73.3 million and is part of the energy industry. Shares are down 16.2% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Cypress Energy Partners

as a

sell

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

Highlights from the ratings report include:

  • The gross profit margin for CYPRESS ENERGY PARTNERS LP is currently extremely low, coming in at 11.83%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.12% trails that of the industry average.
  • Net operating cash flow has decreased to $7.15 million or 26.76% 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 debt-to-equity ratio is very high at 3.41 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 4.34, which shows the ability to cover short-term cash needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 45.37%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 41.93% compared to the year-earlier 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 change in net income from the same quarter one year ago has exceeded that of the Commercial Services & Supplies industry average, but is less than that of the S&P 500. The net income has significantly decreased by 47.4% when compared to the same quarter one year ago, falling from $3.68 million to $1.94 million.

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JAVELIN Mortgage Investment

Dividend Yield: 16.90%

JAVELIN Mortgage Investment

(NYSE:

JMI

) shares currently have a dividend yield of 16.90%.

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 54,300 shares per day over the past 30 days. JAVELIN Mortgage Investment has a market cap of $76.2 million and is part of the real estate industry. Shares are down 39% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

JAVELIN Mortgage Investment

as a

sell

. The area that we feel has been the company's primary weakness has been its meager revenue growth.

Highlights from the ratings report include:

  • 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 revenue fell significantly faster than the industry average of 9.8%. Since the same quarter one year prior, revenues fell by 35.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Compared to where it was trading one year ago, JMI is down 49.13% to its most recent closing price of 6.39. Looking ahead, our view is that this stock still does not have good upside potential and may even suffer further declines.
  • The gross profit margin for JAVELIN MORTGAGE INVESTMENT is currently very high, coming in at 80.25%. Regardless of JMI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, JMI's net profit margin of 194.48% significantly outperformed against the industry.
  • Net operating cash flow has significantly increased by 69.81% to $4.17 million when compared to the same quarter last year. In addition, JAVELIN MORTGAGE INVESTMENT has also vastly surpassed the industry average cash flow growth rate of 13.29%.

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Avianca Holdings

Dividend Yield: 11.30%

Avianca Holdings

(NYSE:

AVH

) shares currently have a dividend yield of 11.30%.

Avianca Holdings S.A., through its subsidiaries, provides air transportation services in North America, Central America, the Caribbean, Colombia, South America, and internationally.

The average volume for Avianca Holdings has been 305,900 shares per day over the past 30 days. Avianca Holdings has a market cap of $588.2 million and is part of the transportation industry. Shares are down 61% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Avianca Holdings

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, poor profit margins, 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 compared to the Airlines industry average, but is greater than that of the S&P 500. The net income has decreased by 7.6% when compared to the same quarter one year ago, dropping from -$21.37 million to -$23.00 million.
  • The debt-to-equity ratio is very high at 2.57 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, AVH has a quick ratio of 0.63, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • The gross profit margin for AVIANCA HOLDINGS SA is rather low; currently it is at 23.84%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.16% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $95.88 million or 51.79% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of AVH's shares over the past 12 months, there is not much good news to report: the stock is down 66.67%, 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.

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