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."

Columbia Property

Dividend Yield: 4.70%

Columbia Property

(NYSE:

CXP

) shares currently have a dividend yield of 4.70%.

Columbia Property Trust, Inc is an equity real estate investment trust. The firm invests in the real estate markets of the United States. It focuses on investing in and managing high-quality commercial office properties. The firm was formerly known as Wells Real Estate Investment Trust II Inc. The company has a P/E ratio of 33.34.

The average volume for Columbia Property has been 499,200 shares per day over the past 30 days. Columbia Property has a market cap of $3.2 billion and is part of the real estate industry. Shares are up 2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Columbia Property

as a

sell

. Among the areas we feel are negative, one of the most important has been poor profit margins.

Highlights from the ratings report include:

  • The gross profit margin for COLUMBIA PROPERTY TRUST INC is currently lower than what is desirable, coming in at 25.78%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.80% significantly trails the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, COLUMBIA PROPERTY TRUST INC's return on equity is below that of both the industry average and the S&P 500.
  • COLUMBIA PROPERTY TRUST INC reported flat earnings per share in the most recent quarter. 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, COLUMBIA PROPERTY TRUST INC increased its bottom line by earning $0.76 versus $0.21 in the prior year. For the next year, the market is expecting a contraction of 67.1% in earnings ($0.25 versus $0.76).
  • After a year of stock price fluctuations, the net result is that CXP'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. Regardless of the rise in share value over the previous year, we feel that the risks involved in investing in this stock do not compensate for any future upside potential.
  • Net operating cash flow has increased to $64.41 million or 16.69% when compared to the same quarter last year. In addition, COLUMBIA PROPERTY TRUST INC has also modestly surpassed the industry average cash flow growth rate of 13.29%.

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Hatteras Financial

Dividend Yield: 11.50%

Hatteras Financial

(NYSE:

HTS

) shares currently have a dividend yield of 11.50%.

Hatteras Financial Corp. operates as an externally-managed mortgage real estate investment trust (REIT) in the United States. The company has a P/E ratio of 74.24.

The average volume for Hatteras Financial has been 808,500 shares per day over the past 30 days. Hatteras Financial has a market cap of $1.5 billion and is part of the real estate industry. Shares are down 17.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

TheStreet Recommends

Hatteras Financial

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 weak operating cash flow.

Highlights from the ratings report include:

  • HTS has underperformed the S&P 500 Index, declining 15.93% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • Net operating cash flow has decreased to $64.69 million or 29.20% 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 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, HATTERAS FINANCIAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • HTS, with its decline in revenue, underperformed when compared the industry average of 9.8%. Since the same quarter one year prior, revenues fell by 10.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for HATTERAS FINANCIAL CORP is currently very high, coming in at 88.32%. Regardless of HTS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HTS's net profit margin of 32.02% compares favorably to the industry average.

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Carlyle Group L P

Dividend Yield: 18.40%

Carlyle Group L P

(NASDAQ:

CG

) shares currently have a dividend yield of 18.40%.

The Carlyle Group LP is an investment firm specializing in direct and fund of fund investments. The company has a P/E ratio of 13.64.

The average volume for Carlyle Group L P has been 881,100 shares per day over the past 30 days. Carlyle Group L P has a market cap of $1.5 billion and is part of the financial services industry. Shares are down 30% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Carlyle Group L P

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:

  • CG'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 35.93%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • CG, with its decline in revenue, underperformed when compared the industry average of 5.1%. Since the same quarter one year prior, revenues fell by 24.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • CARLYLE GROUP LP has improved earnings per share by 25.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CARLYLE GROUP LP reported lower earnings of $1.26 versus $1.80 in the prior year. This year, the market expects an improvement in earnings ($1.46 versus $1.26).
  • 37.74% is the gross profit margin for CARLYLE GROUP LP which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CG's net profit margin of 3.57% significantly trails the industry average.
  • Net operating cash flow has significantly increased by 67.46% to $1,822.00 million when compared to the same quarter last year. In addition, CARLYLE GROUP LP has also modestly surpassed the industry average cash flow growth rate of 65.52%.

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