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5 Value Stocks With High Earnings Yield for Handsome Gains
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Despite recent market gains driven by easing U.S.-China trade tensions, softer inflation, and strong first-quarter 2025 results, uncertainty still lingers. While investor optimism has improved, the broader narrative remains mixed. Many companies are issuing cautious outlooks or withdrawing guidance altogether. This reflects ongoing concerns about rising costs, subdued consumer demand and shaken business confidence — factors rooted in the global trade tensions sparked by President Trump’s tariff policies.
Although some of the worst tariff fears appear to be behind us, the risk hasn’t been fully eliminated. With 10% tariffs as a new baseline, trade-related pressures could resurface. As the year progresses, economic indicators and earnings reports are likely to reveal more of the tariffs’ long-term effects.
Given this backdrop, volatility hasn’t fully vanished, and the current rally appears fragile. In such an environment, value investing may remain a sound strategy. It offers a margin of safety by focusing on fundamentally strong companies trading below their intrinsic worth, which can provide resilience amid market fluctuations and macroeconomic uncertainty.
Aris Mining Corporation (ARMN - Free Report) , LATAM Airlines Group (LTM - Free Report) , Priority Technology Holdings Inc. (PRTH - Free Report) , Heritage Insurance Holdings Inc. (HRTG - Free Report) and Pagaya Technologies Ltd. (PGY - Free Report) are a few value stocks with high earnings yield.
Using the Earnings Yield Metric
Earnings yield is an interesting ratio that you can consider for ferreting out attractively valued stocks. This metric, expressed in percentage, is calculated as annual earnings per share (EPS) divided by market price. This metric measures the anticipated yield (or return) from earnings for each dollar invested in a stock today. While comparing stocks, if other factors are similar, the ones with higher earnings yield are considered undervalued, while those with lower earnings yield are seen as overpriced.
While earnings yield is nothing but the reciprocal of the P/E ratio, it is albeit a little more illuminating than the traditional P/E ratio as it also facilitates the comparison of stocks with fixed-income securities. Investors often 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 a stock is lower than the 10-year Treasury yield, it would be considered overvalued relative to bonds. Conversely, if the yield on the stock is higher, it would be considered undervalued. In this situation, investing in the stock market would be a better option for a value investor.
Setting the Right Filters
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.
We have highlighted five of the 53 stocks that qualified the screen:
Aris Mining is a gold producer primarily in the United States. The Zacks Consensus Estimate for the company’s 2025 and 2026 earnings implies year-over-year growth of 226.5% and 80.6%, respectively. Estimates for 2025 and 2026 earnings per share have moved up by 11 cents and 34 cents, respectively, over the past seven days. Aris Mining currently sports a Zacks Rank #1 and has a Value Score of A.
LATAM Airlines offers domestic and international passenger and cargo air services. The Zacks Consensus Estimate for the company’s 2025 and 2026 earnings implies year-over-year growth of 27.5% and 20%, respectively. Estimates for 2025 and 2026 earnings per share have moved up by 75 cents and 49 cents, respectively, over the past 30 days. LATAM Airlines currently sports a Zacks Rank #1 and has a Value Score of A.
Priority Technology operates as a payment technology company in the United States.The Zacks Consensus Estimate for the company’s 2025 and 2026 earnings implies year-over-year growth of 108% and 34%, respectively. Estimates for 2025 and 2026 earnings per share have moved up by 2 cents and 9 cents, respectively, over the past 30 days. Priority Technology currently sports a Zacks Rank #1 and has a Value Score of A.
Heritage Insurance provides personal and commercial residential insurance products. The Zacks Consensus Estimate for Equinox Gold’s 2025 and 2026 earnings implies year-over-year growth of 62% and 13%, respectively. Estimates for 2025 and 2026 earnings per share have moved up by 82 cents and 55 cents, respectively, over the past 30 days. Heritage Insurance currently sports a Zacks Rank #1 and has a Value Score of B.
Pagaya Technologies is focused on building artificial intelligence infrastructure for the financial ecosystem. The Zacks Consensus Estimate for the company’s 2025 and 2026 earnings implies year-over-year growth of 195% and 28%, respectively. Estimates for 2025 and 2026 earnings per share have moved up by 72 cents each over the past 30 days. Pagaya Technologies 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.
Image: Bigstock
5 Value Stocks With High Earnings Yield for Handsome Gains
Despite recent market gains driven by easing U.S.-China trade tensions, softer inflation, and strong first-quarter 2025 results, uncertainty still lingers. While investor optimism has improved, the broader narrative remains mixed. Many companies are issuing cautious outlooks or withdrawing guidance altogether. This reflects ongoing concerns about rising costs, subdued consumer demand and shaken business confidence — factors rooted in the global trade tensions sparked by President Trump’s tariff policies.
Although some of the worst tariff fears appear to be behind us, the risk hasn’t been fully eliminated. With 10% tariffs as a new baseline, trade-related pressures could resurface. As the year progresses, economic indicators and earnings reports are likely to reveal more of the tariffs’ long-term effects.
Given this backdrop, volatility hasn’t fully vanished, and the current rally appears fragile. In such an environment, value investing may remain a sound strategy. It offers a margin of safety by focusing on fundamentally strong companies trading below their intrinsic worth, which can provide resilience amid market fluctuations and macroeconomic uncertainty.
Aris Mining Corporation (ARMN - Free Report) , LATAM Airlines Group (LTM - Free Report) , Priority Technology Holdings Inc. (PRTH - Free Report) , Heritage Insurance Holdings Inc. (HRTG - Free Report) and Pagaya Technologies Ltd. (PGY - Free Report) are a few value stocks with high earnings yield.
Using the Earnings Yield Metric
Earnings yield is an interesting ratio that you can consider for ferreting out attractively valued stocks. This metric, expressed in percentage, is calculated as annual earnings per share (EPS) divided by market price. This metric measures the anticipated yield (or return) from earnings for each dollar invested in a stock today. While comparing stocks, if other factors are similar, the ones with higher earnings yield are considered undervalued, while those with lower earnings yield are seen as overpriced.
While earnings yield is nothing but the reciprocal of the P/E ratio, it is albeit a little more illuminating than the traditional P/E ratio as it also facilitates the comparison of stocks with fixed-income securities. Investors often 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 a stock is lower than the 10-year Treasury yield, it would be considered overvalued relative to bonds. Conversely, if the yield on the stock is higher, it would be considered undervalued. In this situation, investing in the stock market would be a better option for a value investor.
Setting the Right Filters
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
We have highlighted five of the 53 stocks that qualified the screen:
Aris Mining is a gold producer primarily in the United States. The Zacks Consensus Estimate for the company’s 2025 and 2026 earnings implies year-over-year growth of 226.5% and 80.6%, respectively. Estimates for 2025 and 2026 earnings per share have moved up by 11 cents and 34 cents, respectively, over the past seven days. Aris Mining currently sports a Zacks Rank #1 and has a Value Score of A.
LATAM Airlines offers domestic and international passenger and cargo air services. The Zacks Consensus Estimate for the company’s 2025 and 2026 earnings implies year-over-year growth of 27.5% and 20%, respectively. Estimates for 2025 and 2026 earnings per share have moved up by 75 cents and 49 cents, respectively, over the past 30 days. LATAM Airlines currently sports a Zacks Rank #1 and has a Value Score of A.
Priority Technology operates as a payment technology company in the United States.The Zacks Consensus Estimate for the company’s 2025 and 2026 earnings implies year-over-year growth of 108% and 34%, respectively. Estimates for 2025 and 2026 earnings per share have moved up by 2 cents and 9 cents, respectively, over the past 30 days. Priority Technology currently sports a Zacks Rank #1 and has a Value Score of A.
Heritage Insurance provides personal and commercial residential insurance products. The Zacks Consensus Estimate for Equinox Gold’s 2025 and 2026 earnings implies year-over-year growth of 62% and 13%, respectively. Estimates for 2025 and 2026 earnings per share have moved up by 82 cents and 55 cents, respectively, over the past 30 days. Heritage Insurance currently sports a Zacks Rank #1 and has a Value Score of B.
Pagaya Technologies is focused on building artificial intelligence infrastructure for the financial ecosystem. The Zacks Consensus Estimate for the company’s 2025 and 2026 earnings implies year-over-year growth of 195% and 28%, respectively. Estimates for 2025 and 2026 earnings per share have moved up by 72 cents each over the past 30 days. Pagaya Technologies 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.
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.