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."

Fly Leasing

Dividend Yield: 7.50%

Fly Leasing (NYSE: FLY) shares currently have a dividend yield of 7.50%.

FLY Leasing Limited, together with its subsidiaries, engages in purchasing and leasing commercial aircraft under multi-year contracts to various airlines worldwide.

The average volume for Fly Leasing has been 244,700 shares per day over the past 30 days. Fly Leasing has a market cap of $549.5 million and is part of the diversified services industry. Shares are down 2.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Fly Leasing as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity 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 Trading Companies & Distributors industry. The net income has significantly decreased by 368.8% when compared to the same quarter one year ago, falling from $21.67 million to -$58.26 million.
  • The debt-to-equity ratio is very high at 4.24 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • 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 Trading Companies & Distributors industry and the overall market, FLY LEASING LTD -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • FLY LEASING LTD -ADR 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, FLY LEASING LTD -ADR reported lower earnings of $1.32 versus $1.67 in the prior year. This year, the market expects an improvement in earnings ($1.76 versus $1.32).
  • Compared to where it was trading a year ago, FLY's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

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Gazit-Globe

Dividend Yield: 18.10%

Gazit-Globe (NYSE: GZT) shares currently have a dividend yield of 18.10%.

Gazit-Globe Ltd., through its subsidiaries, acquires, owns, develops, operates, and redevelops supermarket-anchored shopping centers and retail properties in North America, Europe, Israel, and Brazil.

The average volume for Gazit-Globe has been 7,500 shares per day over the past 30 days. Gazit-Globe has a market cap of $1.3 billion and is part of the real estate industry. Shares are down 14.7% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Gazit-Globe 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, deteriorating net income, generally high debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, GZT has underperformed the S&P 500 Index, declining 19.07% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • GAZIT GLOBE's earnings per share declined by 16.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, GAZIT GLOBE reported lower earnings of $0.10 versus $1.51 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Real Estate Management & Development industry average, but is greater than that of the S&P 500. The net income has decreased by 12.1% when compared to the same quarter one year ago, dropping from $43.62 million to $38.34 million.
  • The debt-to-equity ratio is very high at 5.54 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.
  • 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 Real Estate Management & Development industry and the overall market, GAZIT GLOBE's return on equity significantly trails that of both the industry average and the S&P 500.

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Concurrent Computer

Dividend Yield: 10.00%

Concurrent Computer (NASDAQ: CCUR) shares currently have a dividend yield of 10.00%.

Concurrent Computer Corporation provides software, hardware, and professional services for the multi-screen video and real-time markets in North America, the Asia Pacific, Europe, and South America. It operates through two segments, Products and Services.

The average volume for Concurrent Computer has been 28,900 shares per day over the past 30 days. Concurrent Computer has a market cap of $46.5 million and is part of the computer hardware industry. Shares are down 34% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Concurrent Computer 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:
  • CONCURRENT COMPUTER CP 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. During the past fiscal year, CONCURRENT COMPUTER CP swung to a loss, reporting -$0.03 versus $2.04 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 Computers & Peripherals industry. The net income has significantly decreased by 106.1% when compared to the same quarter one year ago, falling from $15.60 million to -$0.95 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 Computers & Peripherals industry and the overall market, CONCURRENT COMPUTER CP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $0.06 million or 99.20% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.83%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 105.81% 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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