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."

Westmoreland Resource Partners

Dividend Yield: 19.20%

Westmoreland Resource Partners (NYSE: WMLP) shares currently have a dividend yield of 19.20%.

Westmoreland Resource Partners, LP produces and markets thermal coal in the United States. It also produces surface mined coal in Ohio. As of December 31, 2014, the company managed 13 active surface mines and managed these mines as 6 mining complexes located in eastern Ohio.

The average volume for Westmoreland Resource Partners has been 1,900 shares per day over the past 30 days. Westmoreland Resource Partners has a market cap of $23.8 million and is part of the metals & mining industry. Shares are up 7681.8% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Westmoreland Resource Partners as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, weak operating cash flow, 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 230.0% when compared to the same quarter one year ago, falling from $9.79 million to -$12.72 million.
  • The debt-to-equity ratio is very high at 11.60 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, WMLP maintains a poor quick ratio of 0.73, which illustrates the inability to avoid short-term cash problems.
  • Net operating cash flow has decreased to $14.46 million or 43.42% 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 gross profit margin for WESTMORELAND RES PARTNERS LP is rather low; currently it is at 18.81%. Regardless of WMLP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, WMLP's net profit margin of -13.48% 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 59.04%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 157.69% 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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Quad/Graphics

Dividend Yield: 11.80%

Quad/Graphics (NYSE: QUAD) shares currently have a dividend yield of 11.80%.

Quad/Graphics, Inc., together with its subsidiaries, provides print and media solutions in the United States, Europe, and Latin America.

The average volume for Quad/Graphics has been 275,300 shares per day over the past 30 days. Quad/Graphics has a market cap of $359.0 million and is part of the diversified services industry. Shares are down 55.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Quad/Graphics 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 poor profit margins.

Highlights from the ratings report include:
  • The debt-to-equity ratio is very high at 3.37 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, QUAD maintains a poor quick ratio of 0.85, which illustrates the inability to avoid short-term cash problems.
  • 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 Commercial Services & Supplies industry and the overall market, QUAD/GRAPHICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for QUAD/GRAPHICS INC is rather low; currently it is at 19.52%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -47.76% is significantly below that of the industry average.
  • QUAD/GRAPHICS 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, QUAD/GRAPHICS INC reported lower earnings of $0.36 versus $0.60 in the prior year. For the next year, the market is expecting a contraction of 19.4% in earnings ($0.29 versus $0.36).
  • 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 Commercial Services & Supplies industry. The net income has significantly decreased by 2363.1% when compared to the same quarter one year ago, falling from $24.40 million to -$552.20 million.

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Foresight Energy

Dividend Yield: 15.30%

Foresight Energy (NYSE: FELP) shares currently have a dividend yield of 15.30%.

Foresight Energy LP engages in the development, mining, transportation, and sale of thermal coal primarily in the eastern United States and internationally. It operates four underground mining complexes, including Williamson, Sugar Camp, Hillsboro, and Macoupin in the Illinois Basin. The company has a P/E ratio of 10.49.

The average volume for Foresight Energy has been 199,100 shares per day over the past 30 days. Foresight Energy has a market cap of $290.1 million and is part of the metals & mining industry. Shares are down 73.9% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Foresight 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, generally disappointing historical performance in the stock itself, deteriorating net income and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The debt-to-equity ratio is very high at 18.59 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, FELP has a quick ratio of 0.56, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • The gross profit margin for FORESIGHT ENERGY LP is currently lower than what is desirable, coming in at 33.76%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 3.18% is above 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 74.60%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 82.85% 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.
  • The change in net income from the same quarter one year ago has 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 82.3% when compared to the same quarter one year ago, falling from $45.72 million to $8.07 million.
  • FORESIGHT ENERGY LP 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, FORESIGHT ENERGY LP increased its bottom line by earning $0.78 versus $0.08 in the prior year. For the next year, the market is expecting a contraction of 69.9% in earnings ($0.24 versus $0.78).

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