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Zacks.com featured highlights: Volkswagen AG, Micron Technology, CAI International and POSCO

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For Immediate Release

Chicago, IL – August 07, 2017 - Stocks in this week’s article include Volkswagen AG (OTCMKTS:VLKAY Free Report), Micron Technology, Inc. (NASDAQ:MU Free Report), CAI International, Inc. (NYSE:CAI Free Report) and POSCO (NYSE:PKX Free Report).

4 Stocks with High Earnings Yield Worth Considering

Earnings yield is a very useful ratio for investors keeping their money in bonds or stock. Mathematically, it is the reciprocal of the price-to-earnings (P/E) ratio and is suitable for tracking undervalued stocks. This ratio is also very helpful for investors when they want to compare stocks with the market or fixed income securities.

Earnings Yield is calculated as (Annual Earnings per Share/Market Price) x 100. It is useful for comparing a stock with other stocks as well as with fixed income securities. While comparing similar stocks, the one with higher earnings yield is likely to fetch better returns.

While comparing the performance of a market index with the 10-year Treasury yield, this ratio comes in handy. When the yield of the market index is more than the 10-year Treasury yield, stocks can be considered as undervalued in comparison to bonds. This implies that investing in the stock market is a better option for a value investor.

However, while T-bills are risk free, 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 broader market.

The Winning Strategy

We have set 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.

Here are four of the 12 stocks that made it through the screen:

Volkswagen AG (OTCMKTS:VLKAYFree Report) is an automobile manufacturer in Europe. This Zacks Rank #1 stock has an expected EPS growth rate of 17.3% for the next 3–5 years.

Boise, ID-based Micron Technology, Inc. (NASDAQ:MUFree Report) is a semiconductor systems provider. It has a Zacks Rank #1 and an expected EPS growth rate of 10% for the next 3–5 years.

San Francisco, CA-based CAI International, Inc. (NYSE:CAIFree Report) is one of the world's leading intermodal freight container leasing and management companies. This Zacks Rank #1 stock has an expected EPS growth rate of 8% for the next 3–5 years.

Pohang, South Korea-based POSCO (NYSE:PKXFree Report) is engaged in manufacturing hot and cold rolled steel products, heavy plate and other steel products for the construction and shipbuilding industries. This Zacks Rank #1 stock has an expected EPS growth rate of 5% for the next 3–5 years.

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.

About Screen of the Week

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Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros.  In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time!Click here for your free subscription to Profit from the Pros.

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Contact: Jim Giaquinto

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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.




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