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."

Transocean Partners

Dividend Yield: 18.20%

Transocean Partners

(NYSE:

RIGP

) shares currently have a dividend yield of 18.20%.

Transocean Partners LLC, together with its subsidiaries, acquires, owns, and operates offshore drilling rigs located in the United States Gulf of Mexico. As of February 17, 2015, the company's fleet consisted of one ultra-deepwater semisubmersible rig and two ultra-deepwater drillships.

The average volume for Transocean Partners has been 174,500 shares per day over the past 30 days. Transocean Partners has a market cap of $549.7 million and is part of the energy industry. Shares are down 9.4% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Transocean Partners

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 and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • TRANSOCEAN PARTNERS LLC 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. For the next year, the market is expecting a contraction of 188.8% in earnings (-$1.11 versus $1.25).
  • 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 Energy Equipment & Services industry. The net income has significantly decreased by 443.6% when compared to the same quarter one year ago, falling from $39.00 million to -$134.00 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 51.26%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 876.00% 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.
  • Despite the weak revenue results, RIGP has outperformed against the industry average of 37.4%. Since the same quarter one year prior, revenues slightly dropped by 8.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, TRANSOCEAN PARTNERS LLC underperformed against that of the industry average and is significantly less than that of the S&P 500.

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Anworth Mortgage Asset

Dividend Yield: 14.30%

Anworth Mortgage Asset

(NYSE:

ANH

) shares currently have a dividend yield of 14.30%.

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

The average volume for Anworth Mortgage Asset has been 763,400 shares per day over the past 30 days. Anworth Mortgage Asset has a market cap of $419.4 million and is part of the real estate industry. Shares are up 2.1% year-to-date as of the close of trading on Tuesday.

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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 and disappointing return on equity.

Highlights from the ratings report include:

  • ANH has underperformed the S&P 500 Index, declining 17.85% from its price level of one year ago. 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'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 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.
  • ANH, with its decline in revenue, underperformed when compared the industry average of 7.2%. Since the same quarter one year prior, revenues slightly dropped by 8.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ANWORTH MTG ASSET CORP reported significant earnings per share improvement 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, 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 ($0.57 versus $0.07).
  • The gross profit margin for ANWORTH MTG ASSET CORP is currently very high, coming in at 89.21%. Regardless of ANH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ANH's net profit margin of 101.85% significantly outperformed against the industry.

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Student Transportation

Dividend Yield: 12.00%

Student Transportation

(NASDAQ:

STB

) shares currently have a dividend yield of 12.00%.

Student Transportation Inc., together with its subsidiaries, provides student transportation solutions in North America. The company offers contracted, managed, special needs transportation, direct-to-parent, and charter services. The company has a P/E ratio of 73.20.

The average volume for Student Transportation has been 157,900 shares per day over the past 30 days. Student Transportation has a market cap of $353.2 million and is part of the transportation industry. Shares are up 7% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Student Transportation

as a

sell

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

Highlights from the ratings report include:

  • STB'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 36.74%, 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. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, STB is still more expensive than most of the other companies in its industry.
  • The gross profit margin for STUDENT TRANSPORTATION INC is currently extremely low, coming in at 8.03%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -10.21% is significantly below that of the industry average.
  • Currently the debt-to-equity ratio of 1.55 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, STB's quick ratio is somewhat strong at 1.27, demonstrating the ability to handle short-term liquidity needs.
  • 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 Road & Rail industry and the overall market, STUDENT TRANSPORTATION INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Road & Rail industry average. The net income has decreased by 9.0% when compared to the same quarter one year ago, dropping from -$8.76 million to -$9.54 million.

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