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."

Credit Suisse Group

Dividend Yield: 5.50%

Credit Suisse Group

(NYSE:

CS

) shares currently have a dividend yield of 5.50%.

Credit Suisse Group AG, together with its subsidiaries, provides various financial services worldwide. It operates through Swiss Universal Bank, International Wealth Management, Asia Pacific, Global Markets, and Investment Banking & Capital Markets segments.

The average volume for Credit Suisse Group has been 3,266,100 shares per day over the past 30 days. Credit Suisse Group has a market cap of $25.3 billion and is part of the banking industry. Shares are down 42.7% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Credit Suisse Group

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, generally disappointing historical performance in the stock itself 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 significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 129.0% when compared to the same quarter one year ago, falling from $1,085.26 million to -$315.14 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 Capital Markets industry and the overall market, CREDIT SUISSE GROUP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CREDIT SUISSE GROUP is currently lower than what is desirable, coming in at 31.96%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -4.21% is significantly below that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 52.18%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 125.00% 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.
  • CREDIT SUISSE GROUP 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CREDIT SUISSE GROUP swung to a loss, reporting -$1.56 versus $1.01 in the prior year. This year, the market expects an improvement in earnings ($0.67 versus -$1.56).

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American Capital Agency

Dividend Yield: 12.60%

American Capital Agency

(NASDAQ:

AGNC

) shares currently have a dividend yield of 12.60%.

American Capital Agency Corp. operates as a real estate investment trust (REIT) in the United States.

The average volume for American Capital Agency has been 3,035,700 shares per day over the past 30 days. American Capital Agency has a market cap of $6.3 billion and is part of the real estate industry. Shares are up 8.9% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

American Capital Agency

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, disappointing return on equity and weak operating cash flow.

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 206.3% when compared to the same quarter one year ago, falling from -$252.00 million to -$772.00 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, AMERICAN CAPITAL AGENCY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $362.00 million or 13.80% 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.
  • After a year of stock price fluctuations, the net result is that AGNC's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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 revenue fell significantly faster than the industry average of 12.0%. Since the same quarter one year prior, revenues fell by 30.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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NGL Energy Partners

Dividend Yield: 8.60%

NGL Energy Partners

(NYSE:

NGL

) shares currently have a dividend yield of 8.60%.

NGL Energy Partners LP, through its subsidiaries, engages in the crude oil logistics, water solutions, liquids, retail propane, and refined products and renewables businesses in the United States.

The average volume for NGL Energy Partners has been 1,481,600 shares per day over the past 30 days. NGL Energy Partners has a market cap of $1.9 billion and is part of the energy industry. Shares are up 69.2% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

NGL Energy Partners

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, poor profit margins, disappointing return on equity 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 340.8% when compared to the same quarter one year ago, falling from $86.78 million to -$208.94 million.
  • Currently the debt-to-equity ratio of 1.77 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, NGL maintains a poor quick ratio of 0.80, which illustrates the inability to avoid short-term cash problems.
  • The gross profit margin for NGL ENERGY PARTNERS LP is currently extremely low, coming in at 10.75%. Regardless of NGL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, NGL's net profit margin of -8.98% significantly underperformed when compared to the industry average.
  • 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. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, NGL ENERGY PARTNERS LP's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of 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 39.06%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 355.12% 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.

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