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."

Artisan Partners Asset Management

Dividend Yield: 5.10%

Artisan Partners Asset Management (NYSE: APAM) shares currently have a dividend yield of 5.10%.

Artisan Partners Asset Management Inc is publicly owned investment manager. It provides its services to pension and profit sharing plans, trusts, endowments, foundations, charitable organizations, government entities, private funds and non-U.S. funds, as well as mutual funds, non-U.S.

The average volume for Artisan Partners Asset Management has been 318,000 shares per day over the past 30 days. Artisan Partners Asset Management has a market cap of $1.8 billion and is part of the financial services industry. Shares are down 7.4% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Artisan Partners Asset Management 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:
  • APAM has underperformed the S&P 500 Index, declining 24.61% 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.
  • 38.28% is the gross profit margin for ARTISAN PARTNERS ASSET MGMT which we consider to be strong. 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 10.33% trails the industry average.
  • Net operating cash flow has significantly increased by 1386.85% to $71.96 million when compared to the same quarter last year. In addition, ARTISAN PARTNERS ASSET MGMT has also vastly surpassed the industry average cash flow growth rate of -34.43%.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Capital Markets industry and the overall market, ARTISAN PARTNERS ASSET MGMT's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • ARTISAN PARTNERS ASSET MGMT reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ARTISAN PARTNERS ASSET MGMT continued to lose money by earning -$0.72 versus -$2.02 in the prior year. This year, the market expects an improvement in earnings ($3.07 versus -$0.72).

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Linn Energy

Dividend Yield: 10.90%

Linn Energy (NASDAQ: LINE) shares currently have a dividend yield of 10.90%.

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 3,039,600 shares per day over the past 30 days. Linn Energy has a market cap of $3.8 billion and is part of the energy industry. Shares are up 15.1% year-to-date as of the close of trading on Friday.

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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 60.08%, 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 -12.11%.

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Theravance

Dividend Yield: 6.00%

Theravance (NASDAQ: THRX) shares currently have a dividend yield of 6.00%.

Theravance, Inc., a royalty management company, is focused on developing respiratory products.

The average volume for Theravance has been 973,500 shares per day over the past 30 days. Theravance has a market cap of $2.0 billion and is part of the drugs industry. Shares are up 21.1% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Theravance as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The gross profit margin for THERAVANCE INC is currently extremely low, coming in at 1.79%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, THRX's net profit margin of -218.76% significantly underperformed when compared to the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 29.67%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 75.00% 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.
  • THERAVANCE 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, THERAVANCE INC reported poor results of -$0.66 versus -$0.30 in the prior year. This year, the market expects an improvement in earnings (-$0.14 versus -$0.66).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 68.1% when compared to the same quarter one year prior, rising from -$49.93 million to -$15.93 million.
  • Net operating cash flow has significantly increased by 88.46% to -$4.61 million when compared to the same quarter last year. In addition, THERAVANCE INC has also vastly surpassed the industry average cash flow growth rate of -8.61%.

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