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."

Teekay Offshore Partners

Dividend Yield: 13.40%

Teekay Offshore Partners

(NYSE:

TOO

) shares currently have a dividend yield of 13.40%.

Teekay Offshore Partners L.P. provides marine transportation, oil production, storage, towage, and floating accommodation services to the offshore oil industry in the North Sea and Brazil. The company has a P/E ratio of 3.53.

The average volume for Teekay Offshore Partners has been 1,020,400 shares per day over the past 30 days. Teekay Offshore Partners has a market cap of $351.0 million and is part of the transportation industry. Shares are down 38.7% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Teekay Offshore Partners

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, 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 291.9% when compared to the same quarter one year ago, falling from $28.52 million to -$54.74 million.
  • The debt-to-equity ratio is very high at 2.85 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 0.46, which clearly demonstrates the inability to cover short-term cash needs.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, TEEKAY OFFSHORE PARTNERS LP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 85.16%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 376.00% 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.
  • TEEKAY OFFSHORE 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. 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, TEEKAY OFFSHORE PARTNERS LP swung to a loss, reporting -$0.22 versus $0.94 in the prior year. This year, the market expects an improvement in earnings ($0.91 versus -$0.22).

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Navios Maritime Midstream Partners

Dividend Yield: 19.00%

Navios Maritime Midstream Partners

(NYSE:

NAP

) shares currently have a dividend yield of 19.00%.

Navios Maritime Midstream Partners L.P. owns and operates very large crude oil (VLCC) tankers under long-term contracts with international oil companies, refiners, and large vessel operators. As of December 31, 2014, it owned four VLCC tanker vessels. The company has a P/E ratio of 68.46.

The average volume for Navios Maritime Midstream Partners has been 111,900 shares per day over the past 30 days. Navios Maritime Midstream Partners has a market cap of $83.1 million and is part of the transportation industry. Shares are down 14.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Navios Maritime Midstream Partners

as a

sell

. The area that we feel has been the company's primary weakness has been its generally higher debt management risk.

Highlights from the ratings report include:

  • NAP's debt-to-equity ratio of 0.71 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 8.75 is very high and demonstrates very strong liquidity.
  • When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, NAVIOS MARITIME MIDSTR PN LP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for NAVIOS MARITIME MIDSTR PN LP is currently very high, coming in at 97.24%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.73% significantly outperformed against the industry average.
  • Net operating cash flow has improved to $6.39 million from having none in the same quarter last year. Since the company had no net operating cash flow for the prior period, we cannot calculate a percent change in order to compare its growth rate with that of its industry average.
  • This stock's share value has moved by only 35.79% over the past year.

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Wheeler Real Estate Investment

Dividend Yield: 14.40%

Wheeler Real Estate Investment

(NASDAQ:

WHLR

) shares currently have a dividend yield of 14.40%.

Wheeler Real Estate Investment Trust, Inc. engages in acquiring, financing, developing, leasing, owning, and managing real estate properties in the mid-Atlantic, southeast, and southwest United States.

The average volume for Wheeler Real Estate Investment has been 83,600 shares per day over the past 30 days. Wheeler Real Estate Investment has a market cap of $96.6 million and is part of the real estate industry. Shares are down 24.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates

Wheeler Real Estate Investment

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 91.5% when compared to the same quarter one year ago, falling from -$3.51 million to -$6.73 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 Real Estate Investment Trusts (REITs) industry and the overall market, WHEELER REAL ESTATE INVT TR's return on equity significantly trails that of both the industry average and the S&P 500.
  • WHLR'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 58.53%, 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.
  • WHEELER REAL ESTATE INVT TR has improved earnings per share by 45.3% in the most recent quarter compared to 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, WHEELER REAL ESTATE INVT TR reported poor results of -$1.85 versus -$0.94 in the prior year. For the next year, the market is expecting a contraction of 190.3% in earnings (-$5.37 versus -$1.85).
  • Net operating cash flow has significantly increased by 276.72% to $5.48 million when compared to the same quarter last year. In addition, WHEELER REAL ESTATE INVT TR has also vastly surpassed the industry average cash flow growth rate of 9.43%.

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