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."

Apollo Residential Mortgage

Dividend Yield: 14.70%

Apollo Residential Mortgage (NYSE: AMTG) shares currently have a dividend yield of 14.70%.

Apollo Residential Mortgage, Inc. primarily invests in residential mortgage assets in the United States.

The average volume for Apollo Residential Mortgage has been 219,800 shares per day over the past 30 days. Apollo Residential Mortgage has a market cap of $415.2 million and is part of the real estate industry. Shares are down 17.7% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Apollo Residential Mortgage as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 300.2% when compared to the same quarter one year ago, falling from $10.88 million to -$21.78 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 Real Estate Investment Trusts (REITs) industry and the overall market, APOLLO RESIDENTIAL MTG INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $12.00 million or 10.99% 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.
  • The share price of APOLLO RESIDENTIAL MTG INC has not done very well: it is down 20.68% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • APOLLO RESIDENTIAL MTG 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. 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, APOLLO RESIDENTIAL MTG INC turned its bottom line around by earning $2.54 versus -$1.91 in the prior year. For the next year, the market is expecting a contraction of 16.9% in earnings ($2.11 versus $2.54).

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Full Circle Capital

Dividend Yield: 14.30%

Full Circle Capital (NASDAQ: FULL) shares currently have a dividend yield of 14.30%.

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 61,200 shares per day over the past 30 days. Full Circle Capital has a market cap of $65.8 million and is part of the financial services industry. Shares are down 37.2% year-to-date as of the close of trading on Monday.

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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 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 Capital Markets industry. The net income has significantly decreased by 2243.2% when compared to the same quarter one year ago, falling from $0.23 million to -$4.91 million.
  • 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 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 49.39%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1150.00% 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.
  • FULL, with its very weak revenue results, has greatly underperformed against the industry average of 5.6%. Since the same quarter one year prior, revenues plummeted by 204.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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. 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, FULL CIRCLE CAPITAL CORP continued to lose money by earning -$0.41 versus -$0.83 in the prior year. This year, the market expects an improvement in earnings ($0.42 versus -$0.41).

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Navios Maritime Holdings

Dividend Yield: 15.40%

Navios Maritime Holdings (NYSE: NM) shares currently have a dividend yield of 15.40%.

Navios Maritime Holdings Inc. operates as a seaborne shipping and logistics company. It focuses on the transportation and transshipment of dry bulk commodities, including iron ore, coal, and grains. It operates in two segments, Dry bulk Vessel Operations and Logistics Business.

The average volume for Navios Maritime Holdings has been 860,600 shares per day over the past 30 days. Navios Maritime Holdings has a market cap of $168.2 million and is part of the transportation industry. Shares are down 61.3% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Navios Maritime 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, 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 underperformed when compared to that of the S&P 500 and the Marine industry average. The net income has significantly decreased by 32.9% when compared to the same quarter one year ago, falling from -$16.60 million to -$22.06 million.
  • The debt-to-equity ratio of 1.34 is relatively high when compared with the industry average, suggesting a need for better debt level management.
  • The gross profit margin for NAVIOS MARITIME HOLDINGS INC is currently lower than what is desirable, coming in at 25.82%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -16.84% is significantly below that of the industry average.
  • Looking at the price performance of NM's shares over the past 12 months, there is not much good news to report: the stock is down 69.45%, 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. 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.
  • NAVIOS MARITIME HOLDINGS INC's earnings per share declined by 25.0% 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, NAVIOS MARITIME HOLDINGS INC continued to lose money by earning -$0.65 versus -$1.08 in the prior year. For the next year, the market is expecting a contraction of 58.5% in earnings (-$1.03 versus -$0.65).

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