4 Sell-Rated Dividend Stocks: MITT, TEU, NAT, RNF

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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 and 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 4 stocks with substantial yields, that ultimately, we have rated "Sell."

AG Mortgage Investment

Dividend Yield: 15.60%

AG Mortgage Investment (NYSE: MITT) shares currently have a dividend yield of 15.60%.

AG Mortgage Investment Trust, Inc., a real estate investment trust, focuses on investing, acquiring, and managing a portfolio of residential mortgage assets, and other real estate-related securities and financial assets. The company has a P/E ratio of 2.98.

The average volume for AG Mortgage Investment has been 427,800 shares per day over the past 30 days. AG Mortgage Investment has a market cap of $573.8 million and is part of the real estate industry. Shares are down 13.7% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates AG Mortgage Investment 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:
  • AG MORTGAGE INVESTMENT TRUST's earnings per share declined by 36.4% 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, AG MORTGAGE INVESTMENT TRUST increased its bottom line by earning $7.34 versus $2.01 in the prior year. For the next year, the market is expecting a contraction of 56.4% in earnings ($3.20 versus $7.34).
  • In its most recent trading session, MITT has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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 gross profit margin for AG MORTGAGE INVESTMENT TRUST is currently very high, coming in at 88.50%. Regardless of MITT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MITT's net profit margin of 33.68% compares favorably to the industry average.
  • Net operating cash flow has significantly increased by 216.09% to $36.44 million when compared to the same quarter last year. In addition, AG MORTGAGE INVESTMENT TRUST has also vastly surpassed the industry average cash flow growth rate of -16.35%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

Box Ships

Dividend Yield: 11.70%

Box Ships (NYSE: TEU) shares currently have a dividend yield of 11.70%.

Box Ships Inc., a shipping company, engages in the seaborne transportation of containers worldwide. As of December 31, 2012, it had a fleet of 9 containerships with a total capacity of approximately 43,925 twenty-foot equivalent units. The company has a P/E ratio of 5.94.

The average volume for Box Ships has been 182,200 shares per day over the past 30 days. Box Ships has a market cap of $102.3 million and is part of the transportation industry. Shares are down 1.2% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Box Ships 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, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • BOX SHIPS INC's earnings per share declined by 48.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, BOX SHIPS INC reported lower earnings of $0.67 versus $0.80 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Marine industry average. The net income has decreased by 13.8% when compared to the same quarter one year ago, dropping from $4.66 million to $4.02 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Marine industry and the overall market, BOX SHIPS INC's return on equity is below that of both the industry average and 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 47.12%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 48.27% 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.
  • Net operating cash flow has increased to $10.18 million or 13.03% when compared to the same quarter last year. Despite an increase in cash flow, BOX SHIPS INC's cash flow growth rate is still lower than the industry average growth rate of 46.23%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

Nordic American Tankers

Dividend Yield: 7.70%

Nordic American Tankers (NYSE: NAT) shares currently have a dividend yield of 7.70%.

Nordic American Tankers Limited, a tanker company, engages in acquiring and chartering double-hull tankers. Its fleet consists of 20 double-hull Suezmax tankers. The company was founded in 1995 and is headquartered in Hamilton, Bermuda.

The average volume for Nordic American Tankers has been 1,064,600 shares per day over the past 30 days. Nordic American Tankers has a market cap of $545.5 million and is part of the transportation industry. Shares are down 6.9% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Nordic American Tankers as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 245.0% when compared to the same quarter one year ago, falling from -$9.39 million to -$32.39 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, NORDIC AMERICAN TANKERS LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for NORDIC AMERICAN TANKERS LTD is currently extremely low, coming in at 1.80%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -50.95% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$21.76 million or 1883.95% 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 34.49%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 227.77% 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.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

Rentech Nitrogen Partners

Dividend Yield: 7.20%

Rentech Nitrogen Partners (NYSE: RNF) shares currently have a dividend yield of 7.20%.

Rentech Nitrogen Partners, L.P. engages in the manufacture and sale of nitrogen fertilizer products for use in the United States. The company operates in two segments, East Dubuque and Pasadena. The company has a P/E ratio of 10.51.

The average volume for Rentech Nitrogen Partners has been 289,000 shares per day over the past 30 days. Rentech Nitrogen Partners has a market cap of $1.1 billion and is part of the chemicals industry. Shares are down 25.8% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Rentech Nitrogen Partners as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, weak operating cash flow 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 Chemicals industry. The net income has decreased by 22.5% when compared to the same quarter one year ago, dropping from $19.37 million to $15.01 million.
  • The debt-to-equity ratio is very high at 2.16 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, RNF has a quick ratio of 0.63, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has decreased to $22.17 million or 37.72% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, RENTECH NITROGEN PARTNERS LP has marginally lower results.
  • RENTECH NITROGEN PARTNERS LP's earnings per share declined by 25.5% 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, RENTECH NITROGEN PARTNERS LP increased its bottom line by earning $2.78 versus $0.36 in the prior year. For the next year, the market is expecting a contraction of 14.4% in earnings ($2.38 versus $2.78).
  • 42.60% is the gross profit margin for RENTECH NITROGEN PARTNERS LP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, RNF's net profit margin of 25.19% compares favorably to the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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