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

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."

Linn Energy

Dividend Yield: 11.30%

Linn Energy (NASDAQ: LINE) shares currently have a dividend yield of 11.30%.

Linn Energy, LLC, an independent oil and natural gas company, acquires and develops oil and natural gas properties in the Unites States.

The average volume for Linn Energy has been 3,300,000 shares per day over the past 30 days. Linn Energy has a market cap of $3.7 billion and is part of the energy industry. Shares are up 11.1% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Linn Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The debt-to-equity ratio is very high at 2.27 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.48, which clearly demonstrates the inability to cover short-term cash needs.
  • The gross profit margin for LINN ENERGY LLC is currently extremely low, coming in at 5.01%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, LINE's net profit margin of -6.96% significantly underperformed when compared to the industry average.
  • LINE'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 56.44%, 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 return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, LINN ENERGY LLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $276.08 million or 22.32% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -13.05%.

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CVR Refining

Dividend Yield: 7.10%

CVR Refining (NYSE: CVRR) shares currently have a dividend yield of 7.10%.

CVR Refining, LP operates as an independent petroleum refiner and marketer of transportation fuels in the United States. It owns and operates a complex full coking medium-sour crude oil refinery in Coffeyville, Kansas. The company has a P/E ratio of 8.54.

The average volume for CVR Refining has been 492,800 shares per day over the past 30 days. CVR Refining has a market cap of $3.1 billion and is part of the energy industry. Shares are up 26.7% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates CVR Refining 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 disappointing return on equity.

Highlights from the ratings report include:
  • CVRR has underperformed the S&P 500 Index, declining 11.64% 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.
  • 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. In comparison to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, CVR REFINING LP has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • CVRR, with its decline in revenue, slightly underperformed the industry average of 19.9%. Since the same quarter one year prior, revenues fell by 24.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • CVR REFINING LP's earnings per share improvement from the most recent quarter was slightly positive. 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, CVR REFINING LP reported lower earnings of $2.44 versus $4.00 in the prior year. This year, the market expects an improvement in earnings ($2.81 versus $2.44).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 1.5% when compared to the same quarter one year prior, going from -$110.20 million to -$108.50 million.

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Tidewater

Dividend Yield: 5.20%

Tidewater (NYSE: TDW) shares currently have a dividend yield of 5.20%.

Tidewater Inc. provides offshore service vessels and marine support services through the operation of a fleet of marine service vessels to the offshore energy industry worldwide.

The average volume for Tidewater has been 1,367,800 shares per day over the past 30 days. Tidewater has a market cap of $897.4 million and is part of the energy industry. Shares are down 40.5% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Tidewater as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, 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 Energy Equipment & Services industry. The net income has significantly decreased by 1377.1% when compared to the same quarter one year ago, falling from $12.58 million to -$160.69 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 Energy Equipment & Services industry and the overall market, TIDEWATER INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 57.52%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1424.00% 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.
  • TIDEWATER 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. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TIDEWATER INC reported lower earnings of $2.83 versus $3.04 in the prior year. This year, the market expects an improvement in earnings ($3.66 versus $2.83).
  • 41.70% is the gross profit margin for TIDEWATER INC which we consider to be strong. Regardless of TDW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TDW's net profit margin of -41.46% significantly underperformed when compared to the industry average.

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