What To Sell: 3 Sell-Rated Dividend Stocks CCUR, RAS, STB

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."

Concurrent Computer

Dividend Yield: 9.50%

Concurrent Computer (NASDAQ: CCUR) shares currently have a dividend yield of 9.50%.

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 18.74.

The average volume for Concurrent Computer has been 34,900 shares per day over the past 30 days. Concurrent Computer has a market cap of $46.6 million and is part of the computer hardware industry. Shares are up 3.4% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

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 14.40% 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.
  • CCUR, with its decline in revenue, underperformed when compared the industry average of 2.5%. 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.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Rait Financial

Dividend Yield: 14.10%

Rait Financial (NYSE: RAS) shares currently have a dividend yield of 14.10%.

RAIT Financial Trust operates as a self-managed and self-advised real estate investment trust (REIT). The company, through its subsidiaries, invests in, manages, and services real estate-related assets with a focus on commercial real estate.

The average volume for Rait Financial has been 1,210,800 shares per day over the past 30 days. Rait Financial has a market cap of $233.6 million and is part of the real estate industry. Shares are down 5.9% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

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

Highlights from the ratings report include:
  • 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, RAIT FINANCIAL TRUST's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for RAIT FINANCIAL TRUST is currently lower than what is desirable, coming in at 31.77%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 2.14% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to -$22.57 million or 183.44% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • RAS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 64.99%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • RAS, with its decline in revenue, slightly underperformed the industry average of 6.3%. Since the same quarter one year prior, revenues slightly dropped by 0.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Student Transportation

Dividend Yield: 12.50%

Student Transportation (NASDAQ: STB) shares currently have a dividend yield of 12.50%.

Student Transportation Inc., together with its subsidiaries, provides student transportation solutions in North America. The company offers contracted, managed, special needs transportation, direct-to-parent, and charter services. The company has a P/E ratio of 70.40.

The average volume for Student Transportation has been 160,400 shares per day over the past 30 days. Student Transportation has a market cap of $339.7 million and is part of the transportation industry. Shares are down 3.8% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

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

Highlights from the ratings report include:
  • STB's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 39.49%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, STB is still more expensive than most of the other companies in its industry.
  • The gross profit margin for STUDENT TRANSPORTATION INC is currently extremely low, coming in at 8.03%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -10.21% is significantly below that of the industry average.
  • Currently the debt-to-equity ratio of 1.55 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, STB's quick ratio is somewhat strong at 1.27, demonstrating the ability to handle short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Road & Rail industry and the overall market, STUDENT TRANSPORTATION INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Road & Rail industry average. The net income has decreased by 9.0% when compared to the same quarter one year ago, dropping from -$8.76 million to -$9.54 million.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

Other helpful dividend tools from TheStreet: