Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer

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."

Five Oaks Investment

Dividend Yield: 14.10%

Five Oaks Investment

(NYSE:

OAKS

) shares currently have a dividend yield of 14.10%.

Five Oaks Investment Corp. focuses on investing, financing, and managing agency and non-agency residential mortgage-backed securities (RMBS), residential mortgage loans, multi-family MBS, and other mortgage-related investments. It would elect to be taxed as a real estate investment trust. The company has a P/E ratio of 354.00.

The average volume for Five Oaks Investment has been 108,800 shares per day over the past 30 days. Five Oaks Investment has a market cap of $156.3 million and is part of the real estate industry. Shares are down 1.7% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

Five Oaks Investment

as a

sell

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

Highlights from the ratings report include:

  • Net operating cash flow has declined marginally to $4.93 million or 9.54% 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.
  • OAKS has underperformed the S&P 500 Index, declining 5.44% 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.
  • When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, FIVE OAKS INVESTMENT CORP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for FIVE OAKS INVESTMENT CORP is rather high; currently it is at 65.49%. Regardless of OAKS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OAKS's net profit margin of 60.89% significantly outperformed against the industry.

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OHA Investment

Dividend Yield: 9.00%

OHA Investment

(NASDAQ:

OHAI

) shares currently have a dividend yield of 9.00%.

OHA Investment Corporation is a business development company specializing in investments in small and mid size and middle market private companies.

The average volume for OHA Investment has been 67,800 shares per day over the past 30 days. OHA Investment has a market cap of $110.1 million and is part of the financial services industry. Shares are up 13.9% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates

OHA Investment

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • OHA INVESTMENT CORP 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. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, OHA INVESTMENT CORP reported lower earnings of $0.19 versus $0.80 in the prior year.
  • 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 220.3% when compared to the same quarter one year ago, falling from $5.05 million to -$6.08 million.
  • 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 Capital Markets industry and the overall market, OHA INVESTMENT CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of OHA INVESTMENT CORP has not done very well: it is down 23.36% 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.
  • The gross profit margin for OHA INVESTMENT CORP is rather high; currently it is at 53.58%. Regardless of OHAI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OHAI's net profit margin of -109.07% significantly underperformed when compared to the industry average.

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JAVELIN Mortgage Investment

Dividend Yield: 14.20%

JAVELIN Mortgage Investment

(NYSE:

JMI

) shares currently have a dividend yield of 14.20%.

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 146,500 shares per day over the past 30 days. JAVELIN Mortgage Investment has a market cap of $91.4 million and is part of the real estate industry. Shares are down 26.4% 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 weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has decreased to $7.90 million or 30.36% 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.
  • JMI'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 43.69%, 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.
  • 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 87.17%. 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 56.68% significantly outperformed against the industry.
  • JAVELIN MORTGAGE INVESTMENT reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.26 versus -$1.96).

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