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."

Atlas Resource Partners

Dividend Yield: 15.00%

Atlas Resource Partners (NYSE: ARP) shares currently have a dividend yield of 15.00%.

Atlas Resource Partners, L.P. operates as an independent developer and producer of natural gas, crude oil, and natural gas liquids in the United States. The company operates in three segments: Gas and Oil Production, Well Construction and Completion, and Other Partnership Management.

The average volume for Atlas Resource Partners has been 1,496,100 shares per day over the past 30 days. Atlas Resource Partners has a market cap of $102.2 million and is part of the energy industry. Shares are down 90.7% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Atlas 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, disappointing return on equity, 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 29853.5% when compared to the same quarter one year ago, falling from $1.89 million to -$560.85 million.
  • The debt-to-equity ratio is very high at 6.15 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 0.50, which clearly demonstrates the inability to cover short-term cash 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, ATLAS RESOURCE PARTNERS LP'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 91.49%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 8085.71% 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.
  • ATLAS RESOURCE 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, ATLAS RESOURCE PARTNERS LP reported poor results of -$7.76 versus -$1.88 in the prior year. This year, the market expects an improvement in earnings (-$0.08 versus -$7.76).

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Harte-Hanks

Dividend Yield: 9.90%

Harte-Hanks (NYSE: HHS) shares currently have a dividend yield of 9.90%.

Harte-Hanks, Inc. provides various marketing services in the United States and internationally. The company operates in two segments, Customer Interaction and Trillium Software.

The average volume for Harte-Hanks has been 292,100 shares per day over the past 30 days. Harte-Hanks has a market cap of $210.1 million and is part of the media industry. Shares are down 55.7% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Harte-Hanks 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, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • HARTE HANKS 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. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, HARTE HANKS INC reported lower earnings of $0.38 versus $0.39 in the prior year. For the next year, the market is expecting a contraction of 31.6% in earnings ($0.26 versus $0.38).
  • 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 Media industry. The net income has significantly decreased by 2762.2% when compared to the same quarter one year ago, falling from $6.42 million to -$170.92 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 Media industry and the overall market, HARTE HANKS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for HARTE HANKS INC is rather low; currently it is at 17.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -140.13% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $2.22 million or 63.88% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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SunCoke Energy

Dividend Yield: 15.60%

SunCoke Energy (NYSE: SXC) shares currently have a dividend yield of 15.60%.

SunCoke Energy, Inc. operates as an independent producer of coke in the Americas. The company offers metallurgical and thermal coal for use as a raw material in the blast furnace steelmaking process. It also provides coal handling and blending services.

The average volume for SunCoke Energy has been 1,331,000 shares per day over the past 30 days. SunCoke Energy has a market cap of $246.4 million and is part of the metals & mining industry. Shares are down 80.1% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates SunCoke Energy as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally high debt management risk.

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 Metals & Mining industry. The net income has significantly decreased by 552.8% when compared to the same quarter one year ago, falling from -$3.60 million to -$23.50 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 Metals & Mining industry and the overall market, SUNCOKE ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for SUNCOKE ENERGY INC is rather low; currently it is at 20.96%. It has decreased from the same quarter the previous year.
  • Net operating cash flow has significantly decreased to $6.40 million or 80.66% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio is very high at 3.56 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, SXC's quick ratio is somewhat strong at 1.14, demonstrating the ability to handle short-term liquidity needs.

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