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."

SeaWorld Entertainment

Dividend Yield: 4.30%

SeaWorld Entertainment

(NYSE:

SEAS

) shares currently have a dividend yield of 4.30%.

SeaWorld Entertainment, Inc. operates as a theme park and entertainment company in the United States. The company has a P/E ratio of 34.49.

The average volume for SeaWorld Entertainment has been 1,184,400 shares per day over the past 30 days. SeaWorld Entertainment has a market cap of $1.8 billion and is part of the leisure industry. Shares are up 12.1% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

SeaWorld Entertainment

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, poor profit margins, 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 Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 96.2% when compared to the same quarter one year ago, falling from -$12.97 million to -$25.45 million.
  • The debt-to-equity ratio is very high at 2.77 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.37, which clearly demonstrates the inability to cover short-term cash needs.
  • The gross profit margin for SEAWORLD ENTERTAINMENT INC is currently lower than what is desirable, coming in at 28.15%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -9.61% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$8.41 million or 162.38% 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 34.99%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 107.14% 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.

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Pan American Silver

Dividend Yield: 5.60%

Pan American Silver

(NASDAQ:

PAAS

) shares currently have a dividend yield of 5.60%.

Pan American Silver Corp., together with its subsidiaries, operates and develops, and explores for silver producing properties and assets in Mexico, Peru, Argentina, and Bolivia. The company also produces and sells gold, zinc, lead, and copper.

The average volume for Pan American Silver has been 2,196,600 shares per day over the past 30 days. Pan American Silver has a market cap of $1.4 billion and is part of the metals & mining industry. Shares are up 2.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Pan American Silver

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating 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 Metals & Mining industry. The net income has significantly decreased by 79.4% when compared to the same quarter one year ago, falling from -$293.61 million to -$526.71 million.
  • 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 Metals & Mining industry and the overall market, PAN AMERICAN SILVER CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $0.82 million or 98.21% 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 29.61%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 79.38% 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.
  • PAN AMERICAN SILVER 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 reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PAN AMERICAN SILVER CORP reported poor results of -$3.62 versus -$2.98 in the prior year. This year, the market expects an improvement in earnings (-$0.11 versus -$3.62).

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Invesco Mortgage Capital

Dividend Yield: 11.50%

Invesco Mortgage Capital

(NYSE:

IVR

) shares currently have a dividend yield of 11.50%.

Invesco Mortgage Capital Inc., a real estate investment trust, focuses on investing in, financing, and managing residential and commercial mortgage-backed securities and mortgage loans. The company invests in residential mortgage-backed securities for which a U.S.

The average volume for Invesco Mortgage Capital has been 1,198,500 shares per day over the past 30 days. Invesco Mortgage Capital has a market cap of $1.9 billion and is part of the real estate industry. Shares are up 2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Invesco Mortgage Capital

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow 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 Real Estate Investment Trusts (REITs) industry and the overall market, INVESCO MORTGAGE CAPITAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $101.40 million or 7.10% 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.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, IVR has underperformed the S&P 500 Index, declining 5.14% 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Real Estate Investment Trusts (REITs) industry average, but is greater than that of the S&P 500. The net income increased by 12.7% when compared to the same quarter one year prior, going from -$80.67 million to -$70.42 million.
  • INVESCO MORTGAGE CAPITAL INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, INVESCO MORTGAGE CAPITAL INC swung to a loss, reporting -$1.75 versus $0.90 in the prior year. This year, the market expects an improvement in earnings ($1.89 versus -$1.75).

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