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."

Enable Midstream Partners

Dividend Yield: 10.60%

Enable Midstream Partners (NYSE: ENBL) shares currently have a dividend yield of 10.60%.

Enable Midstream Partners, LP owns, operates, and develops natural gas and crude oil infrastructure assets in the United States. It operates through two segments, Gathering and Processing, and Transportation and Storage. The company has a P/E ratio of 8.07.

The average volume for Enable Midstream Partners has been 169,600 shares per day over the past 30 days. Enable Midstream Partners has a market cap of $2.6 billion and is part of the energy industry. Shares are down 39.8% year-to-date as of the close of trading on Monday.

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

Highlights from the ratings report include:
  • Net operating cash flow has decreased to $96.00 million or 48.38% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly 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 48.98%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 37.93% 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.
  • The gross profit margin for ENABLE MIDSTREAM PARTNERS LP is currently lower than what is desirable, coming in at 28.64%. Regardless of ENBL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, ENBL's net profit margin of 13.05% compares favorably to the industry average.
  • ENABLE MIDSTREAM PARTNERS LP's earnings per share declined by 37.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ENABLE MIDSTREAM PARTNERS LP increased its bottom line by earning $1.27 versus $0.28 in the prior year. For the next year, the market is expecting a contraction of 34.3% in earnings ($0.84 versus $1.27).
  • The change in net income 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 has significantly decreased by 35.8% when compared to the same quarter one year ago, falling from $120.00 million to $77.00 million.

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Avianca Holdings

Dividend Yield: 13.60%

Avianca Holdings (NYSE: AVH) shares currently have a dividend yield of 13.60%.

Avianca Holdings S.A., through its subsidiaries, provides air transportation services in North America, Central America, the Caribbean, Colombia, South America, and internationally.

The average volume for Avianca Holdings has been 313,700 shares per day over the past 30 days. Avianca Holdings has a market cap of $496.0 million and is part of the transportation industry. Shares are down 64.4% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Avianca Holdings 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, poor profit margins, weak operating cash flow 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 compared to the Airlines industry average, but is greater than that of the S&P 500. The net income has decreased by 7.6% when compared to the same quarter one year ago, dropping from -$21.37 million to -$23.00 million.
  • The debt-to-equity ratio is very high at 2.57 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, AVH has a quick ratio of 0.63, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • The gross profit margin for AVIANCA HOLDINGS SA is rather low; currently it is at 23.84%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.16% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $95.88 million or 51.79% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of AVH's shares over the past 12 months, there is not much good news to report: the stock is down 72.44%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.

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Vanguard Natural Resources

Dividend Yield: 17.90%

Vanguard Natural Resources (NASDAQ: VNR) shares currently have a dividend yield of 17.90%.

Vanguard Natural Resources, LLC, through its subsidiaries, acquires and develops oil and natural gas properties in the United States.

The average volume for Vanguard Natural Resources has been 916,300 shares per day over the past 30 days. Vanguard Natural Resources has a market cap of $683.3 million and is part of the energy industry. Shares are down 46.9% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Vanguard Natural Resources 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, generally high debt management risk, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • VANGUARD NATURAL RESOURCES 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, VANGUARD NATURAL RESOURCES reported lower earnings of $0.54 versus $0.75 in the prior year. For the next year, the market is expecting a contraction of 48.1% in earnings ($0.28 versus $0.54).
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 16650.6% when compared to the same quarter one year ago, falling from -$4.74 million to -$793.65 million.
  • The debt-to-equity ratio is very high at 3.28 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, VNR has a quick ratio of 0.60, 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 Oil, Gas & Consumable Fuels industry and the overall market, VANGUARD NATURAL RESOURCES's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $51.07 million or 32.15% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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