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: 18.70%

Dynagas LNG Partners

(NYSE:

DLNG

) shares currently have a dividend yield of 18.70%.

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 5.55.

The average volume for Dynagas LNG Partners has been 129,300 shares per day over the past 30 days. Dynagas LNG Partners has a market cap of $185.4 million and is part of the transportation industry. Shares are down 8.2% year-to-date as of the close of trading on Thursday.

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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 disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from the ratings report include:

  • DLNG'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 43.61%, 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.
  • Currently the debt-to-equity ratio of 1.51 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.55, which shows the ability to cover short-term cash needs.
  • DYNAGAS LNG PARTNERS LP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, DYNAGAS LNG PARTNERS LP increased its bottom line by earning $1.58 versus $0.62 in the prior year. This year, the market expects an improvement in earnings ($1.67 versus $1.58).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 14.6% when compared to the same quarter one year prior, going from $13.99 million to $16.04 million.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, DYNAGAS LNG PARTNERS LP's return on equity exceeds that of both the industry average and the S&P 500.

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MVC Capital

Dividend Yield: 7.20%

MVC Capital

(NYSE:

MVC

) shares currently have a dividend yield of 7.20%.

MVC Capital, Inc. The company has a P/E ratio of 31.38.

The average volume for MVC Capital has been 64,900 shares per day over the past 30 days. MVC Capital has a market cap of $171.0 million and is part of the financial services industry. Shares are down 0.4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

MVC Capital

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity 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 Capital Markets industry and the overall market, MVC CAPITAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • MVC has underperformed the S&P 500 Index, declining 24.43% from its price level of one year ago. 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.
  • MVC CAPITAL INC has improved earnings per share by 8.8% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, MVC CAPITAL INC swung to a loss, reporting -$0.88 versus $0.82 in the prior year.
  • MVC, with its decline in revenue, slightly underperformed the industry average of 5.7%. 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.
  • Net operating cash flow has significantly increased by 114.37% to $3.82 million when compared to the same quarter last year. Despite an increase in cash flow of 114.37%, MVC CAPITAL INC is still growing at a significantly lower rate than the industry average of 272.65%.

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Fifth Street Asset Management

Dividend Yield: 19.70%

Fifth Street Asset Management

(NASDAQ:

FSAM

) shares currently have a dividend yield of 19.70%.

Fifth Street Asset Management Inc. is an asset management holding company. The firm provides asset management services through its subsidiaries. Fifth Street Asset Management Inc. was founded in 1998 and is headquartered in Greenwich, Connecticut. The company has a P/E ratio of 6.78.

The average volume for Fifth Street Asset Management has been 41,700 shares per day over the past 30 days. Fifth Street Asset Management has a market cap of $20.0 million and is part of the financial services industry. Shares are up 5.5% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Fifth Street Asset Management

as a

sell

. Among the areas we feel are negative, one of the most important has been unimpressive growth in net income over time.

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 Capital Markets industry. The net income has significantly decreased by 91.7% when compared to the same quarter one year ago, falling from $14.18 million to $1.17 million.
  • 45.48% is the gross profit margin for FIFTH STREET ASSET MGMT INC 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, FSAM's net profit margin of 4.69% is significantly lower than the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.7%. Since the same quarter one year prior, revenues slightly dropped by 1.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • This stock's share value has moved by only 70.42% over the past year.
  • FIFTH STREET ASSET MGMT INC has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. This year, the market expects an improvement in earnings ($0.72 versus $0.01).

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