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."

World Point Terminals

Dividend Yield: 9.10%

World Point Terminals

(NYSE:

WPT

) shares currently have a dividend yield of 9.10%.

World Point Terminals, LP owns, operates, develops, and acquires terminals and other assets for the storage of light refined products, heavy refined products, and crude oil in the East Coast, Gulf Coast, and Midwest regions of the United States. The company has a P/E ratio of 14.55.

The average volume for World Point Terminals has been 33,100 shares per day over the past 30 days. World Point Terminals has a market cap of $241.5 million and is part of the energy industry. Shares are down 1.9% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

World Point Terminals

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 feeble growth in its earnings per share.

Highlights from the ratings report include:

  • Looking at the price performance of WPT's shares over the past 12 months, there is not much good news to report: the stock is down 36.95%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.
  • WORLD POINT TERMINALS's earnings per share declined by 20.0% 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, WORLD POINT TERMINALS increased its bottom line by earning $0.98 versus $0.76 in the prior year. For the next year, the market is expecting a contraction of 5.1% in earnings ($0.93 versus $0.98).
  • 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 decreased by 16.1% when compared to the same quarter one year ago, dropping from $8.33 million to $6.99 million.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, WORLD POINT TERMINALS's return on equity exceeds that of both the industry average and the S&P 500.
  • Despite the weak revenue results, WPT has significantly outperformed against the industry average of 36.5%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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Apollo Residential Mortgage

Dividend Yield: 18.30%

Apollo Residential Mortgage

(NYSE:

AMTG

) shares currently have a dividend yield of 18.30%.

Apollo Residential Mortgage, Inc. primarily invests in residential mortgage assets in the United States.

The average volume for Apollo Residential Mortgage has been 336,800 shares per day over the past 30 days. Apollo Residential Mortgage has a market cap of $332.3 million and is part of the real estate industry. Shares are down 12.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Apollo Residential Mortgage

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 300.2% when compared to the same quarter one year ago, falling from $10.88 million to -$21.78 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, APOLLO RESIDENTIAL MTG INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $12.00 million or 10.99% 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.85%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 443.47% 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.
  • APOLLO RESIDENTIAL MTG INC 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. 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, APOLLO RESIDENTIAL MTG INC turned its bottom line around by earning $2.54 versus -$1.91 in the prior year. For the next year, the market is expecting a contraction of 16.9% in earnings ($2.11 versus $2.54).

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Nordic American Offshore

Dividend Yield: 11.90%

Nordic American Offshore

(NYSE:

NAO

) shares currently have a dividend yield of 11.90%.

Nordic American Offshore Ltd. owns and operates platform supply vessels in the North Sea. It owns and operates eight vessels. The company was founded in 2013 and is based in Hamilton, Bermuda.

The average volume for Nordic American Offshore has been 188,200 shares per day over the past 30 days. Nordic American Offshore has a market cap of $92.2 million and is part of the transportation industry. Shares are down 23.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates

Nordic American Offshore

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • NORDIC AMERICAN OFFSHORE 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 237.1% in earnings (-$0.43 versus $0.31).
  • The gross profit margin for NORDIC AMERICAN OFFSHORE is rather low; currently it is at 23.95%. It has decreased significantly from the same period last year.
  • Net operating cash flow has decreased to $4.35 million or 21.08% when compared to the same quarter last year. Despite a decrease in cash flow NORDIC AMERICAN OFFSHORE is still fairing well by exceeding its industry average cash flow growth rate of -38.19%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 66.50%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 208.33% 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.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Energy Equipment & Services industry average, but is less than that of the S&P 500. The net income has significantly decreased by 209.8% when compared to the same quarter one year ago, falling from $2.83 million to -$3.10 million.

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