5 Sell-Rated Dividend Stocks: ARP, MITT, EFC, EBR.B, NAT

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

Atlas Resource Partners

Dividend Yield: 10.80%

Atlas Resource Partners (NYSE: ARP) shares currently have a dividend yield of 10.80%.

Atlas Resource Partners, L.P. engages in the production of natural gas, crude oil, and natural gas liquids in basins across the United States. The company operates through three segments: Gas and Oil Production, Well Construction and Completion, and Other Partnership Management.

The average volume for Atlas Resource Partners has been 492,000 shares per day over the past 30 days Atlas Resource Partners has a market cap of $1.1 billion and is part of the energy industry Shares are down 12.4% year to date as of the close of trading on Friday

TheStreet Ratings rates Atlas Resource 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:
  • Despite currently having a low debt-to-equity ratio of 0.52, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.26 is very low and demonstrates very weak liquidity.
  • Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ATLAS RESOURCE PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • ARP'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 31.77%, 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.
  • 36.58% is the gross profit margin for ATLAS RESOURCE PARTNERS LP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -4.79% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 96.73% to -$0.68 million when compared to the same quarter last year. In addition, ATLAS RESOURCE PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -25.63%.

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

AG Mortgage Investment

Dividend Yield: 17.30%

AG Mortgage Investment (NYSE: MITT) shares currently have a dividend yield of 17.30%.

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 2.68

The average volume for AG Mortgage Investment has been 455,000 shares per day over the past 30 days AG Mortgage Investment has a market cap of $515.7 million and is part of the real estate industry Shares are down 26.8% year to date as of the close of trading on Friday

TheStreet Ratings rates AG Mortgage Investment 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:
  • The share price of AG MORTGAGE INVESTMENT TRUST has not done very well: it is down 14.58% 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'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).
  • The gross profit margin for AG MORTGAGE INVESTMENT TRUST is currently very high, coming in at 88.45%. 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 -14.81%.

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

Ellington Financial

Dividend Yield: 13.70%

Ellington Financial (NYSE: EFC) shares currently have a dividend yield of 13.70%.

No company description available. The company has a P/E ratio of 4.21

The average volume for Ellington Financial has been 245,700 shares per day over the past 30 days Ellington Financial has a market cap of $572.8 million and is part of the real estate industry Shares are down 2.7% year to date as of the close of trading on Friday

TheStreet Ratings rates Ellington Financial 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:
  • ELLINGTON FINANCIAL LLC'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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ELLINGTON FINANCIAL LLC increased its bottom line by earning $5.32 versus $0.61 in the prior year. For the next year, the market is expecting a contraction of 24.3% in earnings ($4.03 versus $5.32).
  • In its most recent trading session, EFC 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 ELLINGTON FINANCIAL LLC is rather high; currently it is at 69.15%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, EFC's net profit margin of 219.42% significantly outperformed against the industry.
  • Net operating cash flow has increased to -$26.54 million or 14.76% when compared to the same quarter last year. In addition, ELLINGTON FINANCIAL LLC has also vastly surpassed the industry average cash flow growth rate of -283.76%.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Capital Markets industry and the overall market, ELLINGTON FINANCIAL LLC's return on equity exceeds that of both the industry average and the S&P 500.

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

Centrais Eletricas Brasileiras

Dividend Yield: 18.00%

Centrais Eletricas Brasileiras (NYSE: EBR.B) shares currently have a dividend yield of 18.00%.

Centrais Eletricas Brasileiras S.A. Eletrobras, together with its subsidiaries, engages in the generation, transmission, and distribution of electricity in Brazil. The company has a P/E ratio of 1.47

The average volume for Centrais Eletricas Brasileiras has been 347,400 shares per day over the past 30 days Centrais Eletricas Brasileiras has a market cap of $5.2 billion and is part of the utilities industry Shares are down 22% year to date as of the close of trading on Friday

TheStreet Ratings rates Centrais Eletricas Brasileiras 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, 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 Electric Utilities industry. The net income has significantly decreased by 102.5% when compared to the same quarter one year ago, falling from $696.49 million to -$17.71 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 Electric Utilities industry and the overall market, ELETROBRAS-CENTR ELETR BRAS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ELETROBRAS-CENTR ELETR BRAS is currently extremely low, coming in at 0.31%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -0.61% trails that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 61.12%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 101.92% 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.
  • ELETROBRAS-CENTR ELETR BRAS has exprienced 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, ELETROBRAS-CENTR ELETR BRAS swung to a loss, reporting -$2.48 versus $1.48 in the prior year. This year, the market expects an improvement in earnings ($0.74 versus -$2.48).

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: 8.50%

Nordic American Tankers (NYSE: NAT) shares currently have a dividend yield of 8.50%.

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 812,900 shares per day over the past 30 days Nordic American Tankers has a market cap of $497.3 million and is part of the transportation industry Shares are down 12.8% year to date as of the close of trading on Friday

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 1.76%. 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 45.52%, 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.

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