We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
5 Value Stocks With High Earnings Yield to Boost Returns
Value investing is the best approach to ferret out great bargains. The method seeks to profit from investing in stocks that appear to be trading at a discount to their intrinsic values and eventually make handsome returns when the stock price rises toward its intrinsic value to reflect actual fundamentals. Though price-to-earnings (P/E) and price-to-sales (P/S) valuation tools are more commonly used for stock selection, the earnings yield metric is also an interesting measure for pick undervalued stocks with solid upside potential.
One could invest in high earnings yield stocks like Apogee Enterprises, Cabot Corporation, STMicroelectronics N.V., United Rentals, Inc. and ProPetro Holding Corp. to fetch handsome long-term rewards.
Unlock Portfolio Value Through Earnings Yield
Earnings yield is useful for investors concerned about the rate of return on an investment. This metric, expressed in percentage, is calculated as annual earnings per share (EPS) divided by market price per share — the inverse of the price-to-earnings (P/E) ratio.
While comparing stocks, if other factors are similar, the one with higher earnings yield is considered undervalued. That’s because this metric measures the anticipated yield (or return) from earnings for each dollar invested in a stock today.
Earnings yield is not as widely used as P/E ratio as a valuation metric but investors most commonly compare the earnings yield of a stock to the prevailing interest rates, such as the current 10-year Treasury yield, to get a sense of the return on investment it offers compared to virtually risk-free returns.
If the yield on the stock is lower than the 10-year Treasury yield, the stock would be considered overvalued relative to bonds. Conversely, if the yield on the stock is higher, it would be considered undervalued.
Here are five of the 144 stocks that made it through the screen:
Apogee: Headquartered in Minnesota, Apogee is a leader in architectural products and services, providing architectural glass, aluminum framing systems and installation services for buildings, and value-added glass and acrylic for custom picture framing and displays.Backed by its strong project pipeline and improving order trends, Apogee expects to sustain backlog growth in fiscal 2023. Also, efforts to control costs and improve productivity and efficiency will help negate the impact of supply-chain headwinds and higher costs.
The Zacks Consensus Estimate for Apogee’s fiscal 2023 sales and earnings implies year-over-year growth of 9% and 54%, respectively. The consensus mark for EPS has moved north by 6 cents over the past 30 days. Over the trailing three quarters, APOG surpassed earnings estimates on all occasions. The stock currently sports a Zacks Rank #1 and has a Value Score of B.
Cabot: Based in Boston, Cabot is a leading global specialty chemicals and performance materials company. The firm is committed to boosting its specialty compounds business globally. It is riding on several acquisitions, including NSCC Carbon black plant, Shenzhen Sanshun, and Tokai Carbon black plant among others. Healthy cash flows, balance sheet strength and shareholder-friendly moves are positives in Cabot’s story.
The Zacks Consensus Estimate for Cabot’s fiscal 2022 sales and earnings implies year-over-year growth of 22.5% each. The consensus mark for EPS has moved north by 5 cents over the past 60 days. Over the trailing four quarters, Cabot surpassed earnings estimates on all occasions, with the average surprise being 16.17%. The stock currently sports a Zacks Rank #1 and a Value Score of B.
STMicroelectronics: Geneva-based STMicroelectronics, designs, develops, manufactures and markets a broad range of semiconductor integrated circuits and discrete devices used in a wide variety of microelectronic applications.A favorable mix and strong pricing remain positives for profitability. Given its exposure to the automotive market, the replenishment of inventories across the automotive supply chain and the ongoing electrification and digitalization boost the company’s prospects.
The Zacks Consensus Estimate for STMicroelectronics’ 2022 sales and earnings implies year-over-year growth of 26% and 80%, respectively. The consensus mark for EPS has moved north by 55 cents over the past seven days. Over the trailing four quarters, STM surpassed earnings estimates on three occasions and missed on the other, with the average surprise being 9.6%. The stock currently sports a Zacks Rank #1 and a Value Score of B.
United Rentals: Headquartered in Stamford, United Rentals is the largest equipment rental company in the world. The company offers 4,400 classes of equipment for rent on an hourly, daily, weekly or monthly basis.United Rentals is expanding geographic borders and product portfolio through acquisitions and joint ventures. During first-half 2022, United Rentals made seven bolt-on acquisitions. It enjoys strong brand recognition and has ample liquidity to meet future business needs.
The Zacks Consensus Estimate for United Rentals’ 2022 sales and earnings implies year-over-year growth of 18.5% and 40.6%, respectively. The consensus mark for EPS has moved north by $1.33 over the past seven days. Over the trailing four quarters, URI surpassed earnings estimates on three occasions and missed on the other, with the average surprise being 8%. The stock currently sports a Zacks Rank #1 and has a Value Score of A.
ProPetro: Midland, TX-based ProPetro Holding is an oilfield services provider operating primarily in the Permian Basin spread over west Texas and New Mexico. The acquisition of Pioneer Natural Resources' Permian pressure pumping assets transformed ProPetro into a Permian-focused pressure pumping powerhouse. The company is likely to benefit from the multi-year upcycle by providing hydraulic fracturing and other well completion services to the upstream firms.ProPetro's debt-free balance sheet is another positive.
The Zacks Consensus Estimate for ProPetro’s 2022 sales and earnings implies year-over-year growth of 45.4% and 281.1%, respectively. The consensus mark for EPS has moved north by 3 cents over the past 30 days. Over the trailing four quarters, PUMP surpassed earnings estimates on two occasions for as many misses. The stock currently sports a Zacks Rank #1 and has a Value Score of B.
You can get the rest of the stocks on this list by signing up now for a 2-week free trial to the Research Wizard stock picking and backtesting software. You can also create your own strategies and test them first before making investments.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
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.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zacks.com featured highlights include Apogee Enterprises, Cabot Corporation, STMicroelectronics, United Rentals and ProPetro Holding
For Immediate Release
Chicago, IL – August 5, 2022 – Stocks in this week’s article are Apogee Enterprises (APOG - Free Report) , Cabot Corporation (CBT - Free Report) , STMicroelectronics N.V. (STM - Free Report) , United Rentals, Inc. (URI - Free Report) and ProPetro Holding Corp. (PUMP - Free Report) .
5 Value Stocks With High Earnings Yield to Boost Returns
Value investing is the best approach to ferret out great bargains. The method seeks to profit from investing in stocks that appear to be trading at a discount to their intrinsic values and eventually make handsome returns when the stock price rises toward its intrinsic value to reflect actual fundamentals. Though price-to-earnings (P/E) and price-to-sales (P/S) valuation tools are more commonly used for stock selection, the earnings yield metric is also an interesting measure for pick undervalued stocks with solid upside potential.
One could invest in high earnings yield stocks like Apogee Enterprises, Cabot Corporation, STMicroelectronics N.V., United Rentals, Inc. and ProPetro Holding Corp. to fetch handsome long-term rewards.
Unlock Portfolio Value Through Earnings Yield
Earnings yield is useful for investors concerned about the rate of return on an investment. This metric, expressed in percentage, is calculated as annual earnings per share (EPS) divided by market price per share — the inverse of the price-to-earnings (P/E) ratio.
While comparing stocks, if other factors are similar, the one with higher earnings yield is considered undervalued. That’s because this metric measures the anticipated yield (or return) from earnings for each dollar invested in a stock today.
Earnings yield is not as widely used as P/E ratio as a valuation metric but investors most commonly compare the earnings yield of a stock to the prevailing interest rates, such as the current 10-year Treasury yield, to get a sense of the return on investment it offers compared to virtually risk-free returns.
If the yield on the stock is lower than the 10-year Treasury yield, the stock would be considered overvalued relative to bonds. Conversely, if the yield on the stock is higher, it would be considered undervalued.
Here are five of the 144 stocks that made it through the screen:
Apogee: Headquartered in Minnesota, Apogee is a leader in architectural products and services, providing architectural glass, aluminum framing systems and installation services for buildings, and value-added glass and acrylic for custom picture framing and displays.Backed by its strong project pipeline and improving order trends, Apogee expects to sustain backlog growth in fiscal 2023. Also, efforts to control costs and improve productivity and efficiency will help negate the impact of supply-chain headwinds and higher costs.
The Zacks Consensus Estimate for Apogee’s fiscal 2023 sales and earnings implies year-over-year growth of 9% and 54%, respectively. The consensus mark for EPS has moved north by 6 cents over the past 30 days. Over the trailing three quarters, APOG surpassed earnings estimates on all occasions. The stock currently sports a Zacks Rank #1 and has a Value Score of B.
Cabot: Based in Boston, Cabot is a leading global specialty chemicals and performance materials company. The firm is committed to boosting its specialty compounds business globally. It is riding on several acquisitions, including NSCC Carbon black plant, Shenzhen Sanshun, and Tokai Carbon black plant among others. Healthy cash flows, balance sheet strength and shareholder-friendly moves are positives in Cabot’s story.
The Zacks Consensus Estimate for Cabot’s fiscal 2022 sales and earnings implies year-over-year growth of 22.5% each. The consensus mark for EPS has moved north by 5 cents over the past 60 days. Over the trailing four quarters, Cabot surpassed earnings estimates on all occasions, with the average surprise being 16.17%. The stock currently sports a Zacks Rank #1 and a Value Score of B.
STMicroelectronics: Geneva-based STMicroelectronics, designs, develops, manufactures and markets a broad range of semiconductor integrated circuits and discrete devices used in a wide variety of microelectronic applications.A favorable mix and strong pricing remain positives for profitability. Given its exposure to the automotive market, the replenishment of inventories across the automotive supply chain and the ongoing electrification and digitalization boost the company’s prospects.
The Zacks Consensus Estimate for STMicroelectronics’ 2022 sales and earnings implies year-over-year growth of 26% and 80%, respectively. The consensus mark for EPS has moved north by 55 cents over the past seven days. Over the trailing four quarters, STM surpassed earnings estimates on three occasions and missed on the other, with the average surprise being 9.6%. The stock currently sports a Zacks Rank #1 and a Value Score of B.
United Rentals: Headquartered in Stamford, United Rentals is the largest equipment rental company in the world. The company offers 4,400 classes of equipment for rent on an hourly, daily, weekly or monthly basis.United Rentals is expanding geographic borders and product portfolio through acquisitions and joint ventures. During first-half 2022, United Rentals made seven bolt-on acquisitions. It enjoys strong brand recognition and has ample liquidity to meet future business needs.
The Zacks Consensus Estimate for United Rentals’ 2022 sales and earnings implies year-over-year growth of 18.5% and 40.6%, respectively. The consensus mark for EPS has moved north by $1.33 over the past seven days. Over the trailing four quarters, URI surpassed earnings estimates on three occasions and missed on the other, with the average surprise being 8%. The stock currently sports a Zacks Rank #1 and has a Value Score of A.
ProPetro: Midland, TX-based ProPetro Holding is an oilfield services provider operating primarily in the Permian Basin spread over west Texas and New Mexico. The acquisition of Pioneer Natural Resources' Permian pressure pumping assets transformed ProPetro into a Permian-focused pressure pumping powerhouse. The company is likely to benefit from the multi-year upcycle by providing hydraulic fracturing and other well completion services to the upstream firms.ProPetro's debt-free balance sheet is another positive.
The Zacks Consensus Estimate for ProPetro’s 2022 sales and earnings implies year-over-year growth of 45.4% and 281.1%, respectively. The consensus mark for EPS has moved north by 3 cents over the past 30 days. Over the trailing four quarters, PUMP surpassed earnings estimates on two occasions for as many misses. The stock currently sports a Zacks Rank #1 and has a Value Score of B.
You can get the rest of the stocks on this list by signing up now for a 2-week free trial to the Research Wizard stock picking and backtesting software. You can also create your own strategies and test them first before making investments.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1963677/5-value-stocks-with-high-earnings-yield-to-boost-returns
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.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Follow us on Twitter: https://www.twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.