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: 12.80%

Dynagas LNG Partners

(NYSE:

DLNG

) shares currently have a dividend yield of 12.80%.

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 8.25.

The average volume for Dynagas LNG Partners has been 238,900 shares per day over the past 30 days. Dynagas LNG Partners has a market cap of $470.2 million and is part of the transportation industry. Shares are up 39.8% year-to-date as of the close of trading on Wednesday.

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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. Along with this, the company manages to maintain a quick ratio of 0.48, which clearly demonstrates the inability to cover short-term cash needs.
  • 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 20.05% 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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Anworth Mortgage Asset

Dividend Yield: 13.00%

Anworth Mortgage Asset

(NYSE:

ANH

) shares currently have a dividend yield of 13.00%.

Anworth Mortgage Asset Corporation operates as a real estate investment trust primarily in the United States.

The average volume for Anworth Mortgage Asset has been 537,700 shares per day over the past 30 days. Anworth Mortgage Asset has a market cap of $446.6 million and is part of the real estate industry. Shares are up 6.4% year-to-date as of the close of trading on Wednesday.

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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, unimpressive growth in net income and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The share price of ANWORTH MTG ASSET CORP has not done very well: it is down 6.68% 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 underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Real Estate Investment Trusts (REITs) industry average. The net income has decreased by 24.2% when compared to the same quarter one year ago, dropping from -$16.31 million to -$20.26 million.
  • ANWORTH MTG ASSET CORP's earnings per share declined by 29.4% 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, 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 ($0.19 versus $0.07).
  • 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. 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.
  • The gross profit margin for ANWORTH MTG ASSET CORP is currently very high, coming in at 90.12%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -55.42% is in-line with the industry average.

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Hoegh LNG Partners

Dividend Yield: 9.30%

Hoegh LNG Partners

(NYSE:

HMLP

) shares currently have a dividend yield of 9.30%.

Hoegh LNG Partners LP focuses on owning, operating, and acquiring floating storage and regasification units (FSRUs), liquefied natural gas (LNG) carriers, and other LNG infrastructure assets under long-term charters. As of March 31, 2016, it had a fleet of four FSRUs. The company has a P/E ratio of 12.51.

The average volume for Hoegh LNG Partners has been 36,000 shares per day over the past 30 days. Hoegh LNG Partners has a market cap of $468.4 million and is part of the transportation industry. Shares are down 2.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Hoegh LNG Partners

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, 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 when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 140.3% when compared to the same quarter one year ago, falling from $2.58 million to -$1.04 million.
  • Currently the debt-to-equity ratio of 1.73 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, HMLP has a quick ratio of 0.67, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has decreased to $11.94 million or 15.73% when compared to the same quarter last year. Despite a decrease in cash flow HOEGH LNG PARTNERS LP is still fairing well by exceeding its industry average cash flow growth rate of -49.20%.
  • The share price of HOEGH LNG PARTNERS LP has not done very well: it is down 16.49% 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. 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.
  • HOEGH LNG PARTNERS LP 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, HOEGH LNG PARTNERS LP increased its bottom line by earning $1.56 versus $0.12 in the prior year. For the next year, the market is expecting a contraction of 8.7% in earnings ($1.43 versus $1.56).

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