For Immediate Release
Chicago, IL – November 12, 2020 – Stocks in this week’s article are Kontoor Brands, Inc. (
KTB Quick Quote KTB - Free Report) , Camping World Holdings, Inc. ( CWH Quick Quote CWH - Free Report) , General Motors Company ( GM Quick Quote GM - Free Report) and Owens & Minor, Inc. ( OMI Quick Quote OMI - Free Report) . Want to Bet on High Earnings Yield Stocks? Check These Out
Investors often use P/E ratio and other valuation metrics while picking stocks that are undervalued. However, it is difficult to use the P/E ratio to compare stocks with fixed income securities. This is where its inverse — Earnings Yield — comes handy. Other things remaining constant, a stock with a higher earnings yield has the potential of providing comparatively greater returns.
Earnings Yield is calculated as (Annual Earnings per Share/Market Price) x 100.
Earnings Yield can be used to compare a stock with other stocks or fixed income securities. It is also used to compare the performance of a market index with the 10-year Treasury yield.
When the yield of the market index is more than the 10-year Treasury yield, stocks can be considered as undervalued than bonds. In this scenario, investing in the stock market would be a better option for a value investor.
However, you need to keep in mind that T-bills are risk free and investing in stocks always comes with a caveat. Hence, it would be a good idea to add a risk premium to the Treasury yield while comparing it with the earnings yield of a stock or the overall market.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1100136/want-to-bet-on-high-earnings-yield-stocks-check-out-these Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
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