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."

CYS Investments

Dividend Yield: 12.80%

CYS Investments

(NYSE:

CYS

) shares currently have a dividend yield of 12.80%.

CYS Investments, Inc., a specialty finance company, makes leveraged investments in whole-pool residential mortgage pass-through securities where the principal and interest payments are guaranteed.

The average volume for CYS Investments has been 1,444,900 shares per day over the past 30 days. CYS Investments has a market cap of $1.2 billion and is part of the real estate industry. Shares are up 14.3% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

CYS Investments

as a

sell

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

Highlights from the ratings report include:

  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, CYS INVESTMENTS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $36.15 million or 32.91% 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.
  • CYS has underperformed the S&P 500 Index, declining 7.97% from its price level of one year ago. 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 company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Real Estate Investment Trusts (REITs) industry average, but is greater than that of the S&P 500. The net income increased by 12.3% when compared to the same quarter one year prior, going from $54.60 million to $61.33 million.
  • CYS INVESTMENTS INC has improved earnings per share by 19.4% 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, CYS INVESTMENTS INC swung to a loss, reporting -$0.17 versus $2.51 in the prior year. This year, the market expects an improvement in earnings ($1.05 versus -$0.17).

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Williams Partners

Dividend Yield: 10.60%

Williams Partners

(NYSE:

WPZ

) shares currently have a dividend yield of 10.60%.

Williams Partners L.P. operates as an energy infrastructure company. It operates through Central, Northeast G&P, Atlantic-Gulf, West, and NGL & Petchem Services segments.

The average volume for Williams Partners has been 2,577,200 shares per day over the past 30 days. Williams Partners has a market cap of $19.3 billion and is part of the energy industry. Shares are up 14.9% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Williams 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 disappointing return on equity.

Highlights from the ratings report include:

  • WPZ'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 44.32%, 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. 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.
  • WPZ's debt-to-equity ratio of 0.87 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.33 is very low and demonstrates very weak liquidity.
  • 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, WILLIAMS 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.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 43.8% when compared to the same quarter one year ago, falling from $89.00 million to $50.00 million.
  • Despite the weak revenue results, WPZ has outperformed against the industry average of 24.6%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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UBS Group

Dividend Yield: 8.00%

UBS Group

(NYSE:

UBS

) shares currently have a dividend yield of 8.00%.

UBS Group AG, together with its subsidiaries, provides financial advice and solutions to private, institutional, and corporate clients worldwide. The company's Wealth Management division provides financial services to wealthy private clients. The company has a P/E ratio of 9.19.

The average volume for UBS Group has been 2,713,400 shares per day over the past 30 days. UBS Group has a market cap of $57.4 billion and is part of the banking industry. Shares are down 20.3% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

UBS Group

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow, 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 against the S&P 500 and did not exceed that of the Capital Markets industry. The net income has significantly decreased by 63.8% when compared to the same quarter one year ago, falling from $2,035.63 million to $737.77 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 27.38%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 65.45% 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.
  • Net operating cash flow has significantly decreased to -$16,571.01 million or 69.67% when compared to the same quarter last year. Despite a decrease in cash flow of 69.67%, UBS GROUP AG is still significantly exceeding the industry average of -198.91%.
  • UBS GROUP AG 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. 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, UBS GROUP AG increased its bottom line by earning $1.65 versus $0.91 in the prior year. For the next year, the market is expecting a contraction of 27.0% in earnings ($1.21 versus $1.65).
  • 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 Capital Markets industry and the overall market, UBS GROUP AG's return on equity is below that of both the industry average and the S&P 500.

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