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 which could 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."

Western Asset Mortgage Capital

Dividend Yield: 18.50%

Western Asset Mortgage Capital (NYSE: WMC) shares currently have a dividend yield of 18.50%.

Western Asset Mortgage Capital Corporation operates as a real estate investment trust in the United States. It primarily focuses on investing in, financing, and managing agency and non-agency residential mortgage-backed securities and commercial mortgage-backed securities.

The average volume for Western Asset Mortgage Capital has been 993,800 shares per day over the past 30 days. Western Asset Mortgage Capital has a market cap of $602.8 million and is part of the real estate industry. Shares are down 3.6% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Western Asset Mortgage Capital as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to $11.51 million or 77.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • WMC'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 26.06%, 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.
  • The gross profit margin for WESTERN ASSET MTG CAPITAL CP is currently very high, coming in at 93.39%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, WMC's net profit margin of -14.37% significantly underperformed when compared to the industry average.
  • Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, WESTERN ASSET MTG CAPITAL CP's return on equity significantly trails that of both the industry average and the S&P 500.
  • WESTERN ASSET MTG CAPITAL CP reported significant earnings per share improvement 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, WESTERN ASSET MTG CAPITAL CP swung to a loss, reporting -$1.18 versus $3.76 in the prior year. This year, the market expects an improvement in earnings ($2.34 versus -$1.18).

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

Pan American Silver

Dividend Yield: 4.10%

Pan American Silver (NASDAQ: PAAS) shares currently have a dividend yield of 4.10%.

Pan American Silver Corp., together with its subsidiaries, operates and develops, and explores for silver producing properties and assets in Mexico, Peru, Argentina, and Bolivia. The company also produces and sells gold, zinc, lead, and copper.

The average volume for Pan American Silver has been 1,287,800 shares per day over the past 30 days. Pan American Silver has a market cap of $1.9 billion and is part of the metals & mining industry. Shares are up 5.2% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates Pan American Silver 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, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • PAN AMERICAN SILVER CORP's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, PAN AMERICAN SILVER CORP swung to a loss, reporting -$2.98 versus $0.57 in the prior year.
  • 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 Metals & Mining industry. The net income has significantly decreased by 66.0% when compared to the same quarter one year ago, falling from $20.15 million to $6.84 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 Metals & Mining industry and the overall market, PAN AMERICAN SILVER CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for PAN AMERICAN SILVER CORP is currently lower than what is desirable, coming in at 32.63%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.26% significantly trails the industry average.
  • In its most recent trading session, PAAS 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 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.

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

Dividend Yield: 10.50%

Anworth Mortgage Asset (NYSE: ANH) shares currently have a dividend yield of 10.50%.

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 12.42.

The average volume for Anworth Mortgage Asset has been 1,860,400 shares per day over the past 30 days. Anworth Mortgage Asset has a market cap of $683.2 million and is part of the real estate industry. Shares are up 25.4% year-to-date as of the close of trading on Tuesday.

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

Highlights from the ratings report include:
  • ANWORTH MTG ASSET CORP's earnings per share declined by 40.0% 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 $0.49 versus $0.68 in the prior year. For the next year, the market is expecting a contraction of 28.6% in earnings ($0.35 versus $0.49).
  • 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 43.4% when compared to the same quarter one year ago, falling from $23.62 million to $13.37 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ANWORTH MTG ASSET CORP's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $14.50 million or 95.38% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • In its most recent trading session, ANH 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. 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.

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

Other helpful dividend tools from TheStreet:

null