5 Sell-Rated Dividend Stocks: AMID, LRE, RNF, NAT, TEU

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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."

American Midstream Partners

Dividend Yield: 8.50%

American Midstream Partners (NYSE: AMID) shares currently have a dividend yield of 8.50%.

American Midstream Partners, LP engages in gathering, treating, processing, and transporting natural gas in the Gulf Coast and Southeast regions of the United States.

The average volume for American Midstream Partners has been 21,400 shares per day over the past 30 days. American Midstream Partners has a market cap of $94.7 million and is part of the utilities industry. Shares are up 47.4% year to date as of the close of trading on Friday.

TheStreet Ratings rates American Midstream Partners as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity and poor profit margins.

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 1029.8% when compared to the same quarter one year ago, falling from $2.33 million to -$21.64 million.
  • The debt-to-equity ratio of 1.03 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.09, which clearly demonstrates the inability to cover short-term cash 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, AMERICAN MIDSTREAM PRTNRS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for AMERICAN MIDSTREAM PRTNRS LP is currently extremely low, coming in at 6.07%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -28.94% is significantly below that of the industry average.
  • In its most recent trading session, AMID 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.

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

LRR Energy

Dividend Yield: 12.90%

LRR Energy (NYSE: LRE) shares currently have a dividend yield of 12.90%.

LRR Energy, L.P., through its subsidiary, LRE Operating, LLC, engages in the acquisition, exploitation, development, and operation of oil and natural gas properties in North America.

The average volume for LRR Energy has been 179,000 shares per day over the past 30 days. LRR Energy has a market cap of $292.3 million and is part of the energy industry. Shares are down 12.7% year to date as of the close of trading on Friday.

TheStreet Ratings rates LRR Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • 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, LRR ENERGY LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $17.26 million or 16.31% when compared to the same quarter last year. Despite a decrease in cash flow of 16.31%, LRR ENERGY LP is in line with the industry average cash flow growth rate of -17.85%.
  • LRE has underperformed the S&P 500 Index, declining 10.86% 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.
  • LRE, with its decline in revenue, slightly underperformed the industry average of 10.1%. Since the same quarter one year prior, revenues fell by 10.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • LRE's debt-to-equity ratio of 0.87 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.33 is sturdy.

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: 12.20%

Rentech Nitrogen Partners (NYSE: RNF) shares currently have a dividend yield of 12.20%.

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 12.03.

The average volume for Rentech Nitrogen Partners has been 174,600 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 26.1% year to date as of the close of trading on Friday.

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, 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 Chemicals industry. The net income has significantly decreased by 30.3% when compared to the same quarter one year ago, falling from $41.23 million to $28.72 million.
  • The debt-to-equity ratio is very high at 3.03 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • The share price of RENTECH NITROGEN PARTNERS LP has not done very well: it is down 17.21% 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.
  • RENTECH NITROGEN PARTNERS LP's earnings per share declined by 31.5% 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 31.5% in earnings ($1.91 versus $2.78).
  • 41.68% 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 27.62% significantly outperformed against the industry.

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: 7.30%

Nordic American Tankers (NYSE: NAT) shares currently have a dividend yield of 7.30%.

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 936,000 shares per day over the past 30 days. Nordic American Tankers has a market cap of $579.0 million and is part of the transportation industry. Shares are down 4% 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, 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 300.1% when compared to the same quarter one year ago, falling from -$7.92 million to -$31.70 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. 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.
  • Net operating cash flow has significantly decreased to -$3.15 million or 131.00% 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 30.62%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 220.00% 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.
  • NORDIC AMERICAN TANKERS LTD 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. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NORDIC AMERICAN TANKERS LTD continued to lose money by earning -$1.38 versus -$1.53 in the prior year. This year, the market expects an improvement in earnings (-$1.28 versus -$1.38).

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 204.50.

The average volume for Box Ships has been 119,000 shares per day over the past 30 days. Box Ships has a market cap of $102.1 million and is part of the transportation industry. Shares are up 0% year to date as of the close of trading on Friday.

TheStreet Ratings rates Box Ships as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, feeble growth in its earnings per share and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • 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. 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.
  • BOX SHIPS INC reported flat earnings per share in the most recent quarter. 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.
  • TEU'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 37.27%, which is also worse than the performance of the S&P 500 Index. 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 $9.85 million or 46.36% when compared to the same quarter last year. Despite an increase in cash flow of 46.36%, BOX SHIPS INC is still growing at a significantly lower rate than the industry average of 153.90%.
  • The gross profit margin for BOX SHIPS INC is rather high; currently it is at 66.01%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.79% is above that of 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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