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."

Dynagas LNG Partners

Dividend Yield: 11.00%

Dynagas LNG Partners

(NYSE:

DLNG

) shares currently have a dividend yield of 11.00%.

Dynagas LNG Partners LP, through its subsidiaries, operates in the seaborne transportation industry worldwide. The company owns and operates liquefied natural gas (LNG) vessels. The company has a P/E ratio of 9.62.

The average volume for Dynagas LNG Partners has been 212,800 shares per day over the past 30 days. Dynagas LNG Partners has a market cap of $546.5 million and is part of the transportation industry. Shares are up 59.3% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Dynagas LNG Partners

as a

sell

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

Highlights from the ratings report include:

  • Currently the debt-to-equity ratio of 1.85 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, DLNG has underperformed the S&P 500 Index, declining 20.54% 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 change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 3.2% when compared to the same quarter one year ago, dropping from $15.32 million to $14.83 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, DYNAGAS LNG PARTNERS LP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • DYNAGAS LNG PARTNERS LP's earnings per share declined by 15.9% 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, DYNAGAS LNG PARTNERS LP increased its bottom line by earning $1.60 versus $1.58 in the prior year. This year, the market expects an improvement in earnings ($1.75 versus $1.60).

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American Midstream Partners

Dividend Yield: 19.50%

American Midstream Partners

(NYSE:

AMID

) shares currently have a dividend yield of 19.50%.

American Midstream Partners, LP engages in gathering, treating, processing, and transporting natural gas in the United States. The company has a P/E ratio of 1.61.

The average volume for American Midstream Partners has been 289,600 shares per day over the past 30 days. American Midstream Partners has a market cap of $299.0 million and is part of the energy industry. Shares are up 12.1% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

American Midstream Partners

as a

sell

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

Highlights from the ratings report include:

  • Currently the debt-to-equity ratio of 1.84 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 this, the company manages to maintain a quick ratio of 0.08, which clearly demonstrates the inability to cover short-term cash needs.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, AMERICAN MIDSTREAM PRTNRS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for AMERICAN MIDSTREAM PRTNRS LP is currently extremely low, coming in at 10.35%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -250.17% is significantly below that of the industry average.
  • AMID'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 51.87%, 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.
  • 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 28.9% when compared to the same quarter one year ago, falling from -$94.30 million to -$121.58 million.

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Anworth Mortgage Asset

Dividend Yield: 12.80%

Anworth Mortgage Asset

(NYSE:

ANH

) shares currently have a dividend yield of 12.80%.

Anworth Mortgage Asset Corporation operates as a real estate investment trust primarily in the United States. The company has a P/E ratio of 58.75.

The average volume for Anworth Mortgage Asset has been 724,400 shares per day over the past 30 days. Anworth Mortgage Asset has a market cap of $458.4 million and is part of the real estate industry. Shares are up 7.6% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Anworth Mortgage Asset

as a

sell

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

Highlights from the ratings report include:

  • ANH has underperformed the S&P 500 Index, declining 10.29% 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.
  • 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, ANWORTH MTG ASSET 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 $13.62 million or 46.81% 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.
  • ANH, with its decline in revenue, underperformed when compared the industry average of 8.1%. Since the same quarter one year prior, revenues slightly dropped by 8.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ANWORTH MTG ASSET CORP reported significant earnings per share improvement 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, ANWORTH MTG ASSET CORP reported lower earnings of $0.07 versus $0.18 in the prior year. This year, the market expects an improvement in earnings ($0.60 versus $0.07).

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