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4 High Earnings Yield Stocks for a Value-Driven Portfolio
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When it comes to investing, one proven strategy that has stood the test of time is value investing. It focuses on identifying stocks trading below their intrinsic value. This approach is rooted in the belief that the market often misprices stocks in the short term, presenting opportunities for long-term investors.
One particular aspect of value investing that has gained attention is investing in high earnings yield stocks. It is calculated by dividing earnings per share (EPS) by the stock price, expressed as a percentage. Essentially, earnings yield represents the return on investment an investor can expect to receive based on the company's earnings. A high earnings yield indicates that the stock is priced relatively lower compared to its earnings potential.
While comparing stocks, if other factors are similar, investors can look out for stocks with higher earnings yield. This is because stocks with higher earnings yield have the potential to provide comparatively greater returns. Wabash (WNC - Free Report) , United Airlines (UAL - Free Report) , TransAlta (TAC - Free Report) and SIGA Technologies (SIGA - Free Report) are some stocks boasting high earnings yield.
Importantly, earnings yield can also be used to compare the performance of a market index with the 10-year Treasury yield. For instance, 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 situation, investing in the stock market would be a better option for a value investor.it should be noted that earnings yield is an important tool for investors with exposure to both stocks and bonds. In fact, with regard to this, earnings yield can be more illuminating than the traditional P/E ratio, as the former facilitates the comparison of stocks with fixed-income securities.
Embracing the power of value investing through earnings yield can help investors make informed decisions and build a robust investment portfolio.
The Winning Strategy
We have set an Earnings Yield greater than 10% as our primary screening criterion but it alone cannot be used for picking stocks that have the potential to generate solid returns. So, we have added the following parameters to the screen:
Estimated EPS growth for the next 12 months greater than or equal to the S&P 500: This metric compares the 12-month forward EPS estimate with the 12-month actual EPS.
Average Daily Volume (20 Day) greater than or equal to 100,000: High trading volume implies that a stock has adequate liquidity.
Here we discuss four of the 37 stocks that qualified the screen:
Wabash is involved in the design and manufacturing of a wide variety of products. These include dry freight and refrigerated trailers, platform trailers, tank trailers, truck bodies for dry and refrigerated transportation, structural composite panels and products, parts and services for the transportation, logistics, and distribution industry, as well as specialty food-grade processing equipment.
The Zacks Consensus Estimate for WNC’s 2023 sales and earnings implies year-over-year growth of 12% and 91%, respectively. EPS estimates have moved up by $1.39 over the past 30 days. The stock currently sports a Zacks Rank #1 and has a Value Score of A.
United Airlines is one of the largest and most prominent airlines globally, providing passenger and cargo transportation services. With an extensive network of domestic and international routes, the company is committed to offering a superior travel experience through exceptional customer service, innovative solutions and advanced technologies.
The Zacks Consensus Estimate for UAL’s 2023 sales and earnings implies year-over-year growth of 18% and 260%, respectively. EPS estimates have moved up by 4 cents over the past seven days. The stock currently sports a Zacks Rank #1 and has a Value Score of A.
TransAlta is a leading power generation and energy solutions company based in Canada. With a diverse portfolio of renewable and thermal power generation facilities, TransAlta plays a vital role in providing reliable and sustainable electricity to customers. The company's focus on clean energy initiatives positions it well in the transition to a low-carbon future.
The Zacks Consensus Estimate for TAC’s 2023 sales and earnings implies year-over-year growth of 6% and 1,325%, respectively. EPS estimates have moved up by 28 cents over the past seven days. The stock currently sports a Zacks Rank #1 and has a Value Score of B.
SIGA Technologies is engaged in applying viral and bacterial genomics and sophisticated computational modeling in the design and development of novel products for the prevention and treatment of serious infectious diseases, with an emphasis on products for biological warfare defense.
The Zacks Consensus Estimate for SIGA’s 2023 sales and earnings implies year-over-year growth of 60% and 130.4%, respectively. EPS estimates have moved up by 11 cents over the past 60 days. The stock currently carries a Zacks Rank #2 and has a Value Score of A.
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.
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4 High Earnings Yield Stocks for a Value-Driven Portfolio
When it comes to investing, one proven strategy that has stood the test of time is value investing. It focuses on identifying stocks trading below their intrinsic value. This approach is rooted in the belief that the market often misprices stocks in the short term, presenting opportunities for long-term investors.
One particular aspect of value investing that has gained attention is investing in high earnings yield stocks. It is calculated by dividing earnings per share (EPS) by the stock price, expressed as a percentage. Essentially, earnings yield represents the return on investment an investor can expect to receive based on the company's earnings. A high earnings yield indicates that the stock is priced relatively lower compared to its earnings potential.
While comparing stocks, if other factors are similar, investors can look out for stocks with higher earnings yield. This is because stocks with higher earnings yield have the potential to provide comparatively greater returns. Wabash (WNC - Free Report) , United Airlines (UAL - Free Report) , TransAlta (TAC - Free Report) and SIGA Technologies (SIGA - Free Report) are some stocks boasting high earnings yield.
Importantly, earnings yield can also be used to compare the performance of a market index with the 10-year Treasury yield. For instance, 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 situation, investing in the stock market would be a better option for a value investor.it should be noted that earnings yield is an important tool for investors with exposure to both stocks and bonds. In fact, with regard to this, earnings yield can be more illuminating than the traditional P/E ratio, as the former facilitates the comparison of stocks with fixed-income securities.
Embracing the power of value investing through earnings yield can help investors make informed decisions and build a robust investment portfolio.
The Winning Strategy
We have set an Earnings Yield greater than 10% as our primary screening criterion but it alone cannot be used for picking stocks that have the potential to generate solid returns. So, we have added the following parameters to the screen:
Estimated EPS growth for the next 12 months greater than or equal to the S&P 500: This metric compares the 12-month forward EPS estimate with the 12-month actual EPS.
Average Daily Volume (20 Day) greater than or equal to 100,000: High trading volume implies that a stock has adequate liquidity.
Current Price greater than or equal to $5.
Buy-Rated Stocks: Stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) have been known to outperform peers in any type of market environment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Our Picks
Here we discuss four of the 37 stocks that qualified the screen:
Wabash is involved in the design and manufacturing of a wide variety of products. These include dry freight and refrigerated trailers, platform trailers, tank trailers, truck bodies for dry and refrigerated transportation, structural composite panels and products, parts and services for the transportation, logistics, and distribution industry, as well as specialty food-grade processing equipment.
The Zacks Consensus Estimate for WNC’s 2023 sales and earnings implies year-over-year growth of 12% and 91%, respectively. EPS estimates have moved up by $1.39 over the past 30 days. The stock currently sports a Zacks Rank #1 and has a Value Score of A.
United Airlines is one of the largest and most prominent airlines globally, providing passenger and cargo transportation services. With an extensive network of domestic and international routes, the company is committed to offering a superior travel experience through exceptional customer service, innovative solutions and advanced technologies.
The Zacks Consensus Estimate for UAL’s 2023 sales and earnings implies year-over-year growth of 18% and 260%, respectively. EPS estimates have moved up by 4 cents over the past seven days. The stock currently sports a Zacks Rank #1 and has a Value Score of A.
TransAlta is a leading power generation and energy solutions company based in Canada. With a diverse portfolio of renewable and thermal power generation facilities, TransAlta plays a vital role in providing reliable and sustainable electricity to customers. The company's focus on clean energy initiatives positions it well in the transition to a low-carbon future.
The Zacks Consensus Estimate for TAC’s 2023 sales and earnings implies year-over-year growth of 6% and 1,325%, respectively. EPS estimates have moved up by 28 cents over the past seven days. The stock currently sports a Zacks Rank #1 and has a Value Score of B.
SIGA Technologies is engaged in applying viral and bacterial genomics and sophisticated computational modeling in the design and development of novel products for the prevention and treatment of serious infectious diseases, with an emphasis on products for biological warfare defense.
The Zacks Consensus Estimate for SIGA’s 2023 sales and earnings implies year-over-year growth of 60% and 130.4%, respectively. EPS estimates have moved up by 11 cents over the past 60 days. The stock currently carries a Zacks Rank #2 and has a Value Score of A.
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.
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.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.