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."

Fifth Street Senior Floating Rate

Dividend Yield: 10.50%

Fifth Street Senior Floating Rate (NASDAQ: FSFR) shares currently have a dividend yield of 10.50%.

Fifth Street Senior Floating Rate Corp. The company has a P/E ratio of 8.60.

The average volume for Fifth Street Senior Floating Rate has been 147,800 shares per day over the past 30 days. Fifth Street Senior Floating Rate has a market cap of $253.4 million and is part of the financial services industry. Shares are down 17.9% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Fifth Street Senior Floating Rate as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$15.47 million or 157.90% 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 share price of FIFTH STREET SR FLTG RATE CP has not done very well: it is down 16.64% 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. 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.
  • FIFTH STREET SR FLTG RATE CP 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 year, the market expects an improvement in earnings ($1.00 versus $0.97).
  • When compared to other companies in the Capital Markets industry and the overall market, FIFTH STREET SR FLTG RATE CP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for FIFTH STREET SR FLTG RATE CP is currently very high, coming in at 76.62%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.61% trails the industry average.

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Concurrent Computer

Dividend Yield: 8.80%

Concurrent Computer (NASDAQ: CCUR) shares currently have a dividend yield of 8.80%.

Concurrent Computer Corporation provides software, hardware, and professional services for real-time markets in North America, the Asia Pacific, Europe, and South America. It operates through two segments, Products and Services. The company has a P/E ratio of 20.11.

The average volume for Concurrent Computer has been 31,100 shares per day over the past 30 days. Concurrent Computer has a market cap of $50.0 million and is part of the computer hardware industry. Shares are down 24.9% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Concurrent Computer as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • CCUR has underperformed the S&P 500 Index, declining 22.78% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • 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. In comparison to the other companies in the Computers & Peripherals industry and the overall market, CONCURRENT COMPUTER CP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has significantly decreased to -$2.15 million or 343.18% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • CONCURRENT COMPUTER CP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CONCURRENT COMPUTER CP swung to a loss, reporting -$0.03 versus $2.04 in the prior year.
  • The revenue fell significantly faster than the industry average of 25.4%. Since the same quarter one year prior, revenues fell by 23.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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CDI

Dividend Yield: 7.60%

CDI (NYSE: CDI) shares currently have a dividend yield of 7.60%.

CDI Corp., together with its subsidiaries, provides engineering, information technology, and staffing solutions. The company operates through three segments: Global Engineering and Technology Solutions, Professional Services Staffing, and Management Recruiters International.

The average volume for CDI has been 101,700 shares per day over the past 30 days. CDI has a market cap of $135.5 million and is part of the diversified services industry. Shares are down 62% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates CDI 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, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • CDI 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. 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, CDI CORP reported lower earnings of $0.14 versus $0.65 in the prior year. For the next year, the market is expecting a contraction of 157.1% in earnings (-$0.08 versus $0.14).
  • 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 Professional Services industry. The net income has significantly decreased by 474.1% when compared to the same quarter one year ago, falling from $5.40 million to -$20.20 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 Professional Services industry and the overall market, CDI CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$9.82 million or 161.57% 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 gross profit margin for CDI CORP is rather low; currently it is at 20.08%. Regardless of CDI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CDI's net profit margin of -8.25% significantly underperformed when compared to the industry average.

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