What To Sell: 5 Sell-Rated Dividend Stocks ATAX, AMTG, DCIX, TEU, EROC

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."

America First Multifamily Investors

Dividend Yield: 8.50%

America First Multifamily Investors (NASDAQ: ATAX) shares currently have a dividend yield of 8.50%.

America First Multifamily Investors, L.P. acquires, holds, sells, and deals in a portfolio of federally tax-exempt mortgage revenue bonds that have been issued to provide construction and/or permanent financing of multifamily residential apartments. The company has a P/E ratio of 18.28.

The average volume for America First Multifamily Investors has been 468,700 shares per day over the past 30 days. America First Multifamily Investors has a market cap of $298.7 million and is part of the real estate industry. Shares are down 7.6% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates America First Multifamily Investors as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • ATAX has underperformed the S&P 500 Index, declining 17.68% 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Thrifts & Mortgage Finance industry average, but is greater than that of the S&P 500. The net income increased by 54.2% when compared to the same quarter one year prior, rising from $2.21 million to $3.41 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, AMERICA FIRST MULTIFAMILY-LP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for AMERICA FIRST MULTIFAMILY-LP is currently very high, coming in at 73.27%. 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 34.94% trails the industry average.
  • Net operating cash flow has significantly increased by 1007.23% to $4.76 million when compared to the same quarter last year. In addition, AMERICA FIRST MULTIFAMILY-LP has also vastly surpassed the industry average cash flow growth rate of -19.17%.

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

Apollo Residential Mortgage

Dividend Yield: 9.90%

Apollo Residential Mortgage (NYSE: AMTG) shares currently have a dividend yield of 9.90%.

Apollo Residential Mortgage, Inc. operates as a residential real estate trust that invests in, finances, and manages residential mortgage assets in the United States. Its investment portfolio includes agency and non-agency residential mortgage-backed securities.

The average volume for Apollo Residential Mortgage has been 339,600 shares per day over the past 30 days. Apollo Residential Mortgage has a market cap of $518.7 million and is part of the real estate industry. Shares are up 8.9% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Apollo Residential Mortgage as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, feeble growth in its earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.98%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 91.40% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • 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. For the next year, the market is expecting a contraction of 74.1% in earnings ($2.12 versus $8.19).
  • 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 83.4% when compared to the same quarter one year ago, falling from $70.40 million to $11.69 million.
  • The gross profit margin for APOLLO RESIDENTIAL MTG INC is currently very high, coming in at 82.48%. Regardless of AMTG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AMTG's net profit margin of 33.95% compares favorably to the industry average.
  • 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.

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

Diana Containerships

Dividend Yield: 15.50%

Diana Containerships (NASDAQ: DCIX) shares currently have a dividend yield of 15.50%.

Diana Containerships Inc., a shipping company, owns and operates containerships. It is involved in the seaborne transportation activities. As of August 23, 2013, its fleet consisted of nine container vessels comprising one Post-Panamax and eight Panamax vessels.

The average volume for Diana Containerships has been 279,700 shares per day over the past 30 days. Diana Containerships has a market cap of $131.5 million and is part of the transportation industry. Shares are down 4.4% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Diana Containerships 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 Marine industry. The net income has significantly decreased by 145.1% when compared to the same quarter one year ago, falling from $1.59 million to -$0.72 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 Marine industry and the overall market, DIANA CONTAINERSHIPS 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 $6.47 million or 29.12% when compared to the same quarter last year. Despite a decrease in cash flow of 29.12%, DIANA CONTAINERSHIPS INC is still significantly exceeding the industry average of -85.84%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 41.16%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 140.00% 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.
  • DIANA CONTAINERSHIPS 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, DIANA CONTAINERSHIPS INC increased its bottom line by earning $0.24 versus $0.16 in the prior year. For the next year, the market is expecting a contraction of 104.2% in earnings (-$0.01 versus $0.24).

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: 8.80%

Box Ships (NYSE: TEU) shares currently have a dividend yield of 8.80%.

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 5.83.

The average volume for Box Ships has been 245,400 shares per day over the past 30 days. Box Ships has a market cap of $68.4 million and is part of the transportation industry. Shares are down 15.8% 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 disappointing return on equity, generally disappointing historical performance in the stock itself and generally high debt management risk.

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.
  • 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 52.20%, 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. 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.
  • TEU's debt-to-equity ratio of 0.81 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. Despite the fact that TEU's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.51 is low and demonstrates weak liquidity.
  • BOX SHIPS INC has improved earnings per share by 42.9% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, BOX SHIPS INC reported lower earnings of $0.58 versus $0.80 in the prior year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Marine industry average. The net income increased by 32.5% when compared to the same quarter one year prior, rising from $3.66 million to $4.84 million.

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

Eagle Rock Energy Partners

Dividend Yield: 11.10%

Eagle Rock Energy Partners (NASDAQ: EROC) shares currently have a dividend yield of 11.10%.

Eagle Rock Energy Partners, L.P., together with its subsidiaries, engages in gathering, compressing, treating, processing, transporting, marketing, and trading natural gas, as well as fractionating and transporting natural gas liquids (NGL).

The average volume for Eagle Rock Energy Partners has been 1,112,000 shares per day over the past 30 days. Eagle Rock Energy Partners has a market cap of $861.8 million and is part of the energy industry. Shares are down 9.2% year-to-date as of the close of trading on Wednesday.

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

Highlights from the ratings report include:
  • Currently the debt-to-equity ratio of 1.57 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, EROC has a quick ratio of 0.66, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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, EAGLE ROCK ENERGY PARTNRS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $47.12 million or 4.28% when compared to the same quarter last year. Despite a decrease in cash flow EAGLE ROCK ENERGY PARTNRS LP is still fairing well by exceeding its industry average cash flow growth rate of -44.35%.
  • EROC'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 41.37%, 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. 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.
  • EAGLE ROCK ENERGY PARTNRS LP has improved earnings per share by 24.4% in the most recent quarter compared to 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, EAGLE ROCK ENERGY PARTNRS LP swung to a loss, reporting -$1.11 versus $0.38 in the prior year. This year, the market expects an improvement in earnings (-$0.08 versus -$1.11).

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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