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."

Gladstone Commercial

Dividend Yield: 9.80%

Gladstone Commercial

(NASDAQ:

GOOD

) shares currently have a dividend yield of 9.80%.

Gladstone Commercial Corporation operates as a real estate investment trust (REIT) in the United States. It engages in investing in and owning net leased industrial and commercial real properties, and making long-term industrial and commercial mortgage loans.

The average volume for Gladstone Commercial has been 136,600 shares per day over the past 30 days. Gladstone Commercial has a market cap of $344.6 million and is part of the real estate industry. Shares are up 5.3% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Gladstone Commercial

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 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 58.4% when compared to the same quarter one year ago, falling from $6.16 million to $2.57 million.
  • The share price of GLADSTONE COMMERCIAL CORP has not done very well: it is down 15.94% 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. 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.
  • Net operating cash flow has decreased to $6.61 million or 30.55% when compared to the same quarter last year. Despite a decrease in cash flow GLADSTONE COMMERCIAL CORP is still fairing well by exceeding its industry average cash flow growth rate of -69.51%.
  • 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, GLADSTONE COMMERCIAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • 44.21% is the gross profit margin for GLADSTONE COMMERCIAL CORP which we consider to be strong. Regardless of GOOD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GOOD's net profit margin of 11.77% is significantly lower than the industry average.

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Nordic American Offshore

Dividend Yield: 9.80%

Nordic American Offshore

(NYSE:

NAO

) shares currently have a dividend yield of 9.80%.

Nordic American Offshore Ltd. owns and operates platform supply vessels in the North Sea. It owns and operates eight vessels. The company was founded in 2013 and is based in Hamilton, Bermuda.

The average volume for Nordic American Offshore has been 162,000 shares per day over the past 30 days. Nordic American Offshore has a market cap of $110.1 million and is part of the transportation industry. Shares are down 4.2% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

TheStreet Recommends

Nordic American Offshore

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, 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:

  • NORDIC AMERICAN OFFSHORE 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, NORDIC AMERICAN OFFSHORE swung to a loss, reporting -$0.46 versus $0.31 in the prior year. For the next year, the market is expecting a contraction of 47.0% in earnings (-$0.68 versus -$0.46).
  • 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. Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, NORDIC AMERICAN OFFSHORE underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for NORDIC AMERICAN OFFSHORE is currently extremely low, coming in at 14.53%. It has decreased significantly from the same period last year.
  • Net operating cash flow has significantly decreased to -$1.64 million or 125.48% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 54.02%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 171.42% 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.

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CONE Midstream Partners

Dividend Yield: 8.50%

CONE Midstream Partners

(NYSE:

CNNX

) shares currently have a dividend yield of 8.50%.

CONE Midstream Partners LP owns, operates, develops, and acquires natural gas gathering and other midstream energy assets in the Marcellus Shale in Pennsylvania and West Virginia. The company has a P/E ratio of 9.24.

The average volume for CONE Midstream Partners has been 263,200 shares per day over the past 30 days. CONE Midstream Partners has a market cap of $647.0 million and is part of the energy industry. Shares are up 15.6% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

CONE Midstream 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 weak operating cash flow.

Highlights from the ratings report include:

  • CNNX'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 55.02%, 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.
  • Net operating cash flow has decreased to $16.75 million or 24.99% when compared to the same quarter last year. Despite a decrease in cash flow CONE MIDSTREAM PARTNERS LP is still fairing well by exceeding its industry average cash flow growth rate of -39.95%.
  • CNNX's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.77 is somewhat weak and could be cause for future problems.
  • The gross profit margin for CONE MIDSTREAM PARTNERS LP is rather high; currently it is at 69.72%. It has increased significantly from the same period last year. Along with this, the net profit margin of 38.21% significantly outperformed against the industry average.
  • CONE MIDSTREAM PARTNERS LP has improved earnings per share by 46.1% in the most recent quarter compared to the same quarter a year ago. 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, CONE MIDSTREAM PARTNERS LP increased its bottom line by earning $1.20 versus $0.26 in the prior year. This year, the market expects an improvement in earnings ($1.39 versus $1.20).

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