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."

Full Circle Capital

Dividend Yield: 12.70%

Full Circle Capital (NASDAQ: FULL) shares currently have a dividend yield of 12.70%.

Full Circle Capital Corporation is a business development company specializing in debt and equity securities of smaller and lower middle-market companies.

The average volume for Full Circle Capital has been 115,300 shares per day over the past 30 days. Full Circle Capital has a market cap of $76.9 million and is part of the financial services industry. Shares are down 26.3% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Full Circle Capital 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 Capital Markets industry. The net income has significantly decreased by 51.0% when compared to the same quarter one year ago, falling from $3.38 million to $1.66 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 Capital Markets industry and the overall market, FULL CIRCLE CAPITAL CORP'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 56.25%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 61.11% 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.
  • FULL CIRCLE CAPITAL CORP 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 two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FULL CIRCLE CAPITAL CORP swung to a loss, reporting -$0.83 versus $0.52 in the prior year. This year, the market expects an improvement in earnings ($0.62 versus -$0.83).
  • FULL, with its decline in revenue, underperformed when compared the industry average of 5.0%. Since the same quarter one year prior, revenues fell by 22.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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Seadrill Partners

Dividend Yield: 19.10%

Seadrill Partners (NYSE: SDLP) shares currently have a dividend yield of 19.10%.

Seadrill Partners LLC owns, operates, and acquires offshore drilling units. The company primarily serves various oil and gas companies. As of March 31, 2015, its fleet consisted of four semi-submersible drilling rigs, three drillships, and three tender rigs. The company has a P/E ratio of 5.53.

The average volume for Seadrill Partners has been 285,300 shares per day over the past 30 days. Seadrill Partners has a market cap of $895.1 million and is part of the energy industry. Shares are down 24.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Seadrill 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 and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Although SDLP's debt-to-equity ratio of 3.97 is very high, it is currently less than that of the industry average. Along with the unfavorable debt-to-equity ratio, SDLP maintains a poor quick ratio of 0.96, which illustrates the inability to avoid short-term cash problems.
  • 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 Energy Equipment & Services industry and the overall market on the basis of return on equity, SEADRILL PARTNERS LLC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • SDLP'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 60.65%, 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.
  • SEADRILL PARTNERS LLC has improved earnings per share by 35.5% 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, SEADRILL PARTNERS LLC reported lower earnings of $1.72 versus $1.86 in the prior year. This year, the market expects an improvement in earnings ($2.87 versus $1.72).
  • The gross profit margin for SEADRILL PARTNERS LLC is rather high; currently it is at 65.34%. 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 9.53% trails the industry average.

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Noranda Aluminum

Dividend Yield: 7.80%

Noranda Aluminum (NYSE: NOR) shares currently have a dividend yield of 7.80%.

Noranda Aluminum Holding Corporation produces and sells primary aluminum and rolled aluminum coils in the United States. The company's Bauxite segment mines, produces, and sells bauxite used for alumina production.

The average volume for Noranda Aluminum has been 1,901,500 shares per day over the past 30 days. Noranda Aluminum has a market cap of $35.7 million and is part of the metals & mining industry. Shares are down 86.6% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Noranda Aluminum as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

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 Metals & Mining industry. The net income has significantly decreased by 234.2% when compared to the same quarter one year ago, falling from -$7.60 million to -$25.40 million.
  • The debt-to-equity ratio is very high at 15.97 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, NOR has a quick ratio of 0.53, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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, NORANDA ALUMINUM HOLDING CP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for NORANDA ALUMINUM HOLDING CP is currently extremely low, coming in at 9.83%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -7.63% is significantly below that of 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 85.23%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 236.36% 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.

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