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."

USD Partners

Dividend Yield: 18.90%

USD Partners

(NYSE:

USDP

) shares currently have a dividend yield of 18.90%.

USD Partners LP acquires, develops, and operates energy-related rail terminals and other midstream infrastructure assets and businesses in the United States and Canada. The company operates through two segments, Terminalling Services and Fleet Services. The company has a P/E ratio of 11.92.

The average volume for USD Partners has been 89,400 shares per day over the past 30 days. USD Partners has a market cap of $63.3 million and is part of the transportation industry. Shares are down 14.6% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

USD Partners

as a

sell

. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures.

Highlights from the ratings report include:

  • Currently the debt-to-equity ratio of 1.98 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, USDP's quick ratio is somewhat strong at 1.38, demonstrating the ability to handle short-term liquidity needs.
  • USDP'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 59.90%, 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.
  • USD PARTNERS LP 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 ($0.88 versus -$0.12).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 564.4% when compared to the same quarter one year prior, rising from -$1.36 million to $6.33 million.
  • The gross profit margin for USD PARTNERS LP is rather high; currently it is at 54.01%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 29.01% significantly outperformed against the industry average.

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Dynagas LNG Partners

Dividend Yield: 18.70%

Dynagas LNG Partners

(NYSE:

DLNG

) shares currently have a dividend yield of 18.70%.

Dynagas LNG Partners LP, through its subsidiaries, operates in the seaborne transportation industry worldwide. The company owns and operates liquefied natural gas (LNG) vessels. The company has a P/E ratio of 5.55.

The average volume for Dynagas LNG Partners has been 156,500 shares per day over the past 30 days. Dynagas LNG Partners has a market cap of $185.6 million and is part of the transportation industry. Shares are down 7.7% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Dynagas LNG Partners

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 generally high debt management risk.

Highlights from the ratings report include:

  • DLNG'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 53.65%, 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.
  • Currently the debt-to-equity ratio of 1.51 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.55, which shows the ability to cover short-term cash needs.
  • DYNAGAS LNG PARTNERS LP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, DYNAGAS LNG PARTNERS LP increased its bottom line by earning $1.58 versus $0.62 in the prior year. This year, the market expects an improvement in earnings ($1.67 versus $1.58).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 14.6% when compared to the same quarter one year prior, going from $13.99 million to $16.04 million.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, DYNAGAS LNG PARTNERS LP's return on equity exceeds that of both the industry average and the S&P 500.

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Natural Resources Partners

Dividend Yield: 15.40%

Natural Resources Partners

(NYSE:

NRP

) shares currently have a dividend yield of 15.40%.

Natural Resource Partners L.P., through its subsidiaries, owns, manages, and leases mineral properties in the United States.

The average volume for Natural Resources Partners has been 524,500 shares per day over the past 30 days. Natural Resources Partners has a market cap of $143.1 million and is part of the metals & mining industry. Shares are down 8.7% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Natural Resources 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, generally high debt management risk, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • NATURAL RESOURCE 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, NATURAL RESOURCE PARTNERS LP reported lower earnings of $0.96 versus $1.54 in the prior year. For the next year, the market is expecting a contraction of 21.9% in earnings ($0.75 versus $0.96).
  • 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 1755.3% when compared to the same quarter one year ago, falling from $36.17 million to -$598.76 million.
  • The debt-to-equity ratio is very high at 13.75 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, NRP maintains a poor quick ratio of 0.82, which illustrates the inability to avoid short-term cash problems.
  • 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, NATURAL RESOURCE PARTNERS LP'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 $55.24 million or 3.86% when compared to the same quarter last year. Despite a decrease in cash flow NATURAL RESOURCE PARTNERS LP is still fairing well by exceeding its industry average cash flow growth rate of -26.59%.

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