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: 5.90%

Columbia Property

(NYSE:

CXP

) shares currently have a dividend yield of 5.90%.

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 56.31.

The average volume for Columbia Property has been 643,500 shares per day over the past 30 days. Columbia Property has a market cap of $2.5 billion and is part of the real estate industry. Shares are down 11.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Columbia Property

as a

sell

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

Highlights from the ratings report include:

  • The share price of COLUMBIA PROPERTY TRUST INC has not done very well: it is down 18.36% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • 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 81.9% when compared to the same quarter one year ago, falling from $56.23 million to $10.17 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, COLUMBIA PROPERTY TRUST INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for COLUMBIA PROPERTY TRUST INC is currently lower than what is desirable, coming in at 25.78%. Regardless of CXP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CXP's net profit margin of 7.56% is significantly lower than the industry average.
  • Net operating cash flow has decreased to $48.10 million or 26.87% when compared to the same quarter last year. Despite a decrease in cash flow COLUMBIA PROPERTY TRUST INC is still fairing well by exceeding its industry average cash flow growth rate of -69.51%.

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PennyMac Mortgage Investment

Dividend Yield: 14.30%

PennyMac Mortgage Investment

(NYSE:

PMT

) shares currently have a dividend yield of 14.30%.

PennyMac Mortgage Investment Trust, a specialty finance company, invests primarily in residential mortgage loans and mortgage-related assets in the United States. The company operates through two segments, Correspondent Production and Investment Activities. The company has a P/E ratio of 11.34.

The average volume for PennyMac Mortgage Investment has been 1,015,400 shares per day over the past 30 days. PennyMac Mortgage Investment has a market cap of $970.8 million and is part of the real estate industry. Shares are down 13.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

PennyMac Mortgage Investment

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 40.7% when compared to the same quarter one year ago, falling from $26.51 million to $15.71 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, PENNYMAC MORTGAGE INVEST TR's return on equity is below 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 40.35%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 38.23% 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.
  • PENNYMAC MORTGAGE INVEST TR's earnings per share declined by 38.2% in the most recent quarter compared to 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, PENNYMAC MORTGAGE INVEST TR reported lower earnings of $1.15 versus $2.46 in the prior year. This year, the market expects an improvement in earnings ($1.65 versus $1.15).
  • 46.80% is the gross profit margin for PENNYMAC MORTGAGE INVEST TR which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 19.14% trails the industry average.

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National Oilwell Varco

Dividend Yield: 6.30%

National Oilwell Varco

(NYSE:

NOV

) shares currently have a dividend yield of 6.30%.

National Oilwell Varco, Inc. designs, manufactures, and sells equipment and components used in oil and gas drilling, completion, and production operations; and provides oilfield services to the upstream oil and gas industry worldwide.

The average volume for National Oilwell Varco has been 6,902,600 shares per day over the past 30 days. National Oilwell Varco has a market cap of $11.0 billion and is part of the energy industry. Shares are down 11.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

National Oilwell Varco

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, 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 when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 356.0% when compared to the same quarter one year ago, falling from $595.00 million to -$1,523.00 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 Energy Equipment & Services industry and the overall market on the basis of return on equity, NATIONAL OILWELL VARCO INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for NATIONAL OILWELL VARCO INC is currently lower than what is desirable, coming in at 25.83%. It has decreased from the same quarter the previous year.
  • Net operating cash flow has decreased to $614.00 million or 16.57% when compared to the same quarter last year. Despite a decrease in cash flow NATIONAL OILWELL VARCO INC is still fairing well by exceeding its industry average cash flow growth rate of -42.52%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 49.48%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 392.08% 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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