3 Sell-Rated Dividend Stocks: GLOP, RNF, BONT

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."

GasLog Partners

Dividend Yield: 14.80%

GasLog Partners (NYSE: GLOP) shares currently have a dividend yield of 14.80%.

GasLog Partners LP acquires, owns, and operates liquefied natural gas (LNG) carriers. The company provides LNG transportation services under long-term charters worldwide. As of February 16, 2015, it had a fleet of five LNG carriers. The company was founded in 2014 and is based in Monaco.

The average volume for GasLog Partners has been 162,300 shares per day over the past 30 days. GasLog Partners has a market cap of $281.7 million and is part of the transportation industry. Shares are down 45.1% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates GasLog Partners as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • 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. Along with this, the company manages to maintain a quick ratio of 0.24, which clearly demonstrates the inability to cover short-term cash needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 47.71%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 40.77% 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 S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 5.0% when compared to the same quarter one year ago, dropping from $20.24 million to $19.23 million.
  • GASLOG PARTNERS LP's earnings per share declined by 40.8% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($2.20 versus $1.86).
  • The gross profit margin for GASLOG PARTNERS LP is currently very high, coming in at 79.03%. Regardless of GLOP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GLOP's net profit margin of 37.37% significantly outperformed against the industry.

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Rentech Nitrogen Partners

Dividend Yield: 10.00%

Rentech Nitrogen Partners (NYSE: RNF) shares currently have a dividend yield of 10.00%.

Rentech Nitrogen Partners, L.P. produces and sells nitrogen fertilizer products in the United States and internationally. It operates through two segments, East Dubuque and Pasadena.

The average volume for Rentech Nitrogen Partners has been 96,900 shares per day over the past 30 days. Rentech Nitrogen Partners has a market cap of $388.1 million and is part of the chemicals industry. Shares are down 1.4% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Rentech Nitrogen Partners as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow, poor profit margins 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 Chemicals industry. The net income has significantly decreased by 721.7% when compared to the same quarter one year ago, falling from -$3.11 million to -$25.51 million.
  • Net operating cash flow has decreased to $44.81 million or 11.45% 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 RENTECH NITROGEN PARTNERS LP is currently lower than what is desirable, coming in at 30.29%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, RNF's net profit margin of -30.25% significantly underperformed when compared to the industry average.
  • RENTECH NITROGEN PARTNERS 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. 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, RENTECH NITROGEN PARTNERS LP swung to a loss, reporting -$0.03 versus $0.10 in the prior year. This year, the market expects an improvement in earnings ($1.75 versus -$0.03).
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings 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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Bon-Ton Stores

Dividend Yield: 9.60%

Bon-Ton Stores (NASDAQ: BONT) shares currently have a dividend yield of 9.60%.

The Bon-Ton Stores, Inc., through its subsidiaries, operates department stores in the United States. The company's stores offer brand-name fashion apparel and accessories for women, men, and children, as well as cosmetics, home furnishings, and other goods.

The average volume for Bon-Ton Stores has been 519,600 shares per day over the past 30 days. Bon-Ton Stores has a market cap of $38.0 million and is part of the retail industry. Shares are down 71% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Bon-Ton Stores 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, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • BON-TON STORES 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 year. We anticipate that this should continue in the coming year. During the past fiscal year, BON-TON STORES INC reported poor results of -$0.51 versus -$0.37 in the prior year. For the next year, the market is expecting a contraction of 442.9% in earnings (-$2.77 versus -$0.51).
  • 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 Multiline Retail industry. The net income has significantly decreased by 208.8% when compared to the same quarter one year ago, falling from -$11.01 million to -$33.99 million.
  • Net operating cash flow has decreased to -$151.70 million or 49.40% 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 72.34%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 201.75% 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.
  • BONT, with its decline in revenue, underperformed when compared the industry average of 15.1%. Since the same quarter one year prior, revenues slightly dropped by 2.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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