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."

Institutional Financial Markets

Dividend Yield: 7.10%

Institutional Financial Markets

(AMEX:

IFMI

) shares currently have a dividend yield of 7.10%.

Institutional Financial Markets, Inc. is a publicly owned investment manager. The firm primarily provides its services to individuals and institutions. It manages separate client-focused fixed income portfolios. Institutional Financial Markets, Inc. The company has a P/E ratio of 11.30.

The average volume for Institutional Financial Markets has been 7,100 shares per day over the past 30 days. Institutional Financial Markets has a market cap of $15.1 million and is part of the financial services industry. Shares are down 1.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Institutional Financial Markets

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The gross profit margin for INSTITUTIONAL FINANCIAL MKTS is currently extremely low, coming in at 5.48%. Regardless of IFMI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, IFMI's net profit margin of -4.12% significantly underperformed when compared to the industry average.
  • IFMI'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 31.52%, 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Capital Markets industry and the overall market, INSTITUTIONAL FINANCIAL MKTS's return on equity is below that of both the industry average and the S&P 500.
  • INSTITUTIONAL FINANCIAL MKTS reported significant earnings per share improvement 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. During the past fiscal year, INSTITUTIONAL FINANCIAL MKTS continued to lose money by earning -$0.17 versus -$1.09 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 57.5% when compared to the same quarter one year prior, rising from -$1.26 million to -$0.53 million.

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JAVELIN Mortgage Investment

Dividend Yield: 17.70%

JAVELIN Mortgage Investment

(NYSE:

JMI

) shares currently have a dividend yield of 17.70%.

JAVELIN Mortgage Investment Corp., a real estate investment trust (REIT), invests primarily in fixed rate agency, and fixed rate and hybrid adjustable rate non-agency residential mortgage-backed securities in the United States. The company qualifies as a REIT for federal income tax purposes.

The average volume for JAVELIN Mortgage Investment has been 75,400 shares per day over the past 30 days. JAVELIN Mortgage Investment has a market cap of $72.9 million and is part of the real estate industry. Shares are down 2.4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

JAVELIN Mortgage Investment

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 351.5% when compared to the same quarter one year ago, falling from $6.57 million to -$16.53 million.
  • Net operating cash flow has decreased to $6.79 million or 14.01% 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 35.47%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 352.72% 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.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, JAVELIN MORTGAGE INVESTMENT's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for JAVELIN MORTGAGE INVESTMENT is currently very high, coming in at 72.52%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, JMI's net profit margin of -247.27% significantly underperformed when compared to the industry average.

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EV Energy Partners

Dividend Yield: 11.50%

EV Energy Partners

(NASDAQ:

EVEP

) shares currently have a dividend yield of 11.50%.

EV Energy Partners, L.P. engages in the acquisition, development, and production of oil and natural gas properties in the United States. The company operates in two segments, Exploration and Production, and Midstream.

The average volume for EV Energy Partners has been 752,200 shares per day over the past 30 days. EV Energy Partners has a market cap of $128.0 million and is part of the energy industry. Shares are down 11.4% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

EV Energy Partners

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, disappointing return on equity, 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 123.1% when compared to the same quarter one year ago, falling from $42.62 million to -$9.84 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, EV ENERGY PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $45.47 million or 15.63% when compared to the same quarter last year. Despite a decrease in cash flow EV ENERGY PARTNERS LP is still fairing well by exceeding its industry average cash flow growth rate of -26.87%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 80.92%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 127.77% 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.
  • EV ENERGY 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, EV ENERGY PARTNERS LP turned its bottom line around by earning $2.32 versus -$1.69 in the prior year. For the next year, the market is expecting a contraction of 17.7% in earnings ($1.91 versus $2.32).

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