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Actionable news in QUAD: QUAD/GRAPHICS Inc,

3 Sell-Rated Dividend Stocks: QUAD, CHMI, QIWI

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." Quad/Graphics Quad/Graphics (NYSE: QUAD) shares currently have a dividend yield of 9.60%. Quad/Graphics, Inc., together with its subsidiaries, provides print and media solutions in the United States, Europe, Latin America, and internationally. The company operates in two segments, United States Print and Related Services; and International. The average volume for Quad/Graphics has been 271,000 shares per day over the past 30 days. Quad/Graphics has a market cap of $626.6 million and is part of the diversified services industry. Shares are up 32% year-to-date as of the close of trading on Tuesday. 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 Quad/Graphics 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, poor profit margins and weak operating cash flow. 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 Commercial Services & Supplies industry. The net income has significantly decreased by 136.4% when compared to the same quarter one year ago, falling from $25.80 million to -$9.40 million.
  • The debt-to-equity ratio is very high at 3.18...

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