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."

Crestwood Equity Partners

Dividend Yield: 9.20%

Crestwood Equity Partners

(NYSE:

CEQP

) shares currently have a dividend yield of 9.20%.

Crestwood Equity Partners LP provides midstream solutions to customers in the crude oil, natural gas liquids (NGLs), and natural gas sectors of the energy industry in the United States. The company has a P/E ratio of 19.90.

The average volume for Crestwood Equity Partners has been 404,500 shares per day over the past 30 days. Crestwood Equity Partners has a market cap of $1.1 billion and is part of the energy industry. Shares are down 26.5% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Crestwood Equity Partners

as a

sell

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

Highlights from the ratings report include:

  • CEQP'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 57.10%, 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. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, CEQP is still more expensive than most of the other companies in its industry.
  • The debt-to-equity ratio is very high at 3.09 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, CEQP maintains a poor quick ratio of 0.91, which illustrates the inability to avoid short-term cash problems.
  • The gross profit margin for CRESTWOOD EQUITY PARTNERS LP is rather low; currently it is at 20.94%. Regardless of CEQP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CEQP's net profit margin of 3.85% compares favorably to the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CRESTWOOD EQUITY PARTNERS LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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Five Oaks Investment

Dividend Yield: 14.00%

Five Oaks Investment

(NYSE:

OAKS

) shares currently have a dividend yield of 14.00%.

Five Oaks Investment Corp. focuses on investing, financing, and managing agency and non-agency residential mortgage-backed securities (RMBS), residential mortgage loans, multi-family MBS, and other mortgage-related investments. It would elect to be taxed as a real estate investment trust. The company has a P/E ratio of 356.00.

The average volume for Five Oaks Investment has been 110,500 shares per day over the past 30 days. Five Oaks Investment has a market cap of $157.2 million and is part of the real estate industry. Shares are down 1.6% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Five Oaks Investment

as a

sell

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

Highlights from the ratings report include:

  • Net operating cash flow has declined marginally to $4.93 million or 9.54% 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.
  • In its most recent trading session, OAKS has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, FIVE OAKS INVESTMENT CORP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for FIVE OAKS INVESTMENT CORP is rather high; currently it is at 65.49%. Regardless of OAKS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OAKS's net profit margin of 60.89% significantly outperformed against the industry.

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JAVELIN Mortgage Investment

Dividend Yield: 16.80%

JAVELIN Mortgage Investment

(NYSE:

JMI

) shares currently have a dividend yield of 16.80%.

No company description available.

The average volume for JAVELIN Mortgage Investment has been 148,100 shares per day over the past 30 days. JAVELIN Mortgage Investment has a market cap of $102.6 million and is part of the real estate industry. Shares are down 17.8% year-to-date as of the close of trading on Thursday.

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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 weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has decreased to $7.90 million or 30.36% 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.
  • JMI'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 37.81%, 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.
  • 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 87.17%. 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 56.68% significantly outperformed against the industry.
  • JAVELIN MORTGAGE INVESTMENT reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.31 versus -$1.96).

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