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."

Westmoreland Resource Partners

Dividend Yield: 13.80%

Westmoreland Resource Partners

(NYSE:

WMLP

) shares currently have a dividend yield of 13.80%.

Westmoreland Resource Partners, LP produces and markets thermal coal in the United States. It also produces surface mined coal in Ohio. The company has a P/E ratio of 12.33.

The average volume for Westmoreland Resource Partners has been 5,800 shares per day over the past 30 days. Westmoreland Resource Partners has a market cap of $33.2 million and is part of the metals & mining industry. Shares are up 37.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates

Westmoreland Resource Partners

as a

sell

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

Highlights from the ratings report include:

  • The debt-to-equity ratio is very high at 96.22 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, WMLP has a quick ratio of 0.69, this demonstrates the lack of ability of the company to cover short-term liquidity 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, WESTMORELAND RES PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for WESTMORELAND RES PARTNERS LP is rather low; currently it is at 24.32%. Regardless of WMLP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, WMLP's net profit margin of -9.57% significantly underperformed when compared to the industry average.
  • WMLP has underperformed the S&P 500 Index, declining 24.65% 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 change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 43.1% when compared to the same quarter one year ago, falling from -$6.19 million to -$8.86 million.

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AG Mortgage Investment

Dividend Yield: 12.80%

AG Mortgage Investment

(NYSE:

MITT

) shares currently have a dividend yield of 12.80%.

AG Mortgage Investment Trust, Inc., a real estate investment trust, focuses on investing in, acquiring, and managing a portfolio of residential mortgage assets, other real estate-related securities, and financial assets.

The average volume for AG Mortgage Investment has been 140,000 shares per day over the past 30 days. AG Mortgage Investment has a market cap of $416.7 million and is part of the real estate industry. Shares are up 15.3% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

AG Mortgage Investment

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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 119.2% when compared to the same quarter one year ago, falling from $12.76 million to -$2.45 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, AG MORTGAGE INVESTMENT TRUST's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $14.65 million or 37.11% 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.
  • The share price of AG MORTGAGE INVESTMENT TRUST has not done very well: it is down 19.87% 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. 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.
  • AG MORTGAGE INVESTMENT TRUST 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 year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, AG MORTGAGE INVESTMENT TRUST reported lower earnings of $0.01 versus $3.38 in the prior year. This year, the market expects an improvement in earnings ($1.76 versus $0.01).

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PBF Logistics

Dividend Yield: 7.60%

PBF Logistics

(NYSE:

PBFX

) shares currently have a dividend yield of 7.60%.

PBF Logistics LP owns, leases, acquires, develops, and operates crude oil and refined petroleum products terminals, pipelines, storage facilities, and other logistics assets in the United States. It operates through two segments, transportation and Terminaling, and Storage. The company has a P/E ratio of 10.04.

The average volume for PBF Logistics has been 46,100 shares per day over the past 30 days. PBF Logistics has a market cap of $823.3 million and is part of the energy industry. Shares are up 2.8% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

PBF Logistics

as a

sell

. Among the areas we feel are negative, one of the most important has been the company's poor growth in earnings per share.

Highlights from the ratings report include:

  • PBF LOGISTICS 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, PBF LOGISTICS LP increased its bottom line by earning $2.18 versus $0.93 in the prior year. For the next year, the market is expecting a contraction of 6.9% in earnings ($2.03 versus $2.18).
  • After a year of stock price fluctuations, the net result is that PBFX's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 7.5% when compared to the same quarter one year prior, going from $17.76 million to $19.09 million.
  • The gross profit margin for PBF LOGISTICS LP is currently very high, coming in at 83.53%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 52.24% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 52.82% to $25.85 million when compared to the same quarter last year. In addition, PBF LOGISTICS LP has also vastly surpassed the industry average cash flow growth rate of -49.98%.

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