Sell These Top 3 Sell-Rated Dividend Stocks Today: LPHI, LRE, ANH

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

Life Partners Holdings

Dividend Yield: 9.40%

Life Partners Holdings (NASDAQ: LPHI) shares currently have a dividend yield of 9.40%.

Life Partners Holdings, Inc., through its subsidiary, Life Partners, Inc., operates in the secondary market for life insurance worldwide. It facilitates the sale of life settlements between sellers and purchasers, but does not take possession or control of the policies.

The average volume for Life Partners Holdings has been 40,500 shares per day over the past 30 days. Life Partners Holdings has a market cap of $39.5 million and is part of the insurance industry. Shares are down 20.2% year to date as of the close of trading on Friday.

TheStreet Ratings rates Life Partners Holdings as a sell. The area that we feel has been the company's primary weakness has been its declining revenues.

Highlights from the ratings report include:
  • Since the same quarter one year prior, revenues plummeted by 59.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 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.
  • Net operating cash flow has significantly decreased to -$2.87 million or 63.29% when compared to the same quarter last year.
  • LIFE PARTNERS HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, LIFE PARTNERS HOLDINGS INC continued to lose money by earning -$0.16 versus -$0.17 in the prior year.
  • LPHI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.77, which clearly demonstrates the ability to cover short-term cash needs.

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: 12.70%

LRR Energy (NYSE: LRE) shares currently have a dividend yield of 12.70%.

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 116,700 shares per day over the past 30 days. LRR Energy has a market cap of $296.4 million and is part of the energy industry. Shares are down 11.5% 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. In conjunction, when comparing current results to the industry average, LRR ENERGY LP has marginally lower results.
  • LRE has underperformed the S&P 500 Index, declining 15.90% 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 6.5%. 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.

Anworth Mortgage Asset Corporation

Dividend Yield: 13.50%

Anworth Mortgage Asset Corporation (NYSE: ANH) shares currently have a dividend yield of 13.50%.

Anworth Mortgage Asset Corporation operates as a real estate investment trust in the United States. The company primarily invests in the United States agency mortgage-backed securities, which are securities representing obligations guaranteed by the U.S. The company has a P/E ratio of 7.51.

The average volume for Anworth Mortgage Asset Corporation has been 1,319,600 shares per day over the past 30 days. Anworth Mortgage Asset Corporation has a market cap of $633.4 million and is part of the real estate industry. Shares are down 22.3% year to date as of the close of trading on Friday.

TheStreet Ratings rates Anworth Mortgage Asset Corporation 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, weak operating cash flow, generally disappointing historical performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:
  • ANWORTH MTG ASSET CORP's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ANWORTH MTG ASSET CORP reported lower earnings of $0.68 versus $0.90 in the prior year. For the next year, the market is expecting a contraction of 20.6% in earnings ($0.54 versus $0.68).
  • 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 Real Estate Investment Trusts (REITs) industry average. The net income has decreased by 10.9% when compared to the same quarter one year ago, dropping from $25.81 million to $23.00 million.
  • Net operating cash flow has significantly decreased to -$198.26 million or 120.56% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of ANH's shares over the past 12 months, there is not much good news to report: the stock is down 35.80%, 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.
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, ANWORTH MTG ASSET CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of 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.

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