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4 High-Earnings Yield Value Picks Ahead of Potential Fed Rate Cut
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Key Takeaways
Markets hit record highs yesterday as investors await the Fed's expected quarter-point rate cut.
Value investing gains traction amid uncertainty, spotlighting high-earnings-yield stocks.
Aura Minerals, Commercial Metals, Par Pacific and CorMedix emerge as top value picks.
Major U.S. stock market indices notched record highs yesterday as investors await the Federal Reserve’s policy decision. The Dow, the S&P 500 and the Nasdaq all hit fresh highs, with the S&P 500 climbing 0.23% to 6,890.89, after briefly topping the 6,900 mark for the first time ever.
Markets widely expect the Fed to announce another quarter-point rate cut today, followed by potential additional cuts in the coming months. Despite a slight uptick in September inflation, analysts believe the central bank will prioritize supporting a softening labor market over curbing price pressure. However, missing economic data amid the ongoing government shutdown could complicate policy signals.
In this environment of economic uncertainty, value investing offers a disciplined way to navigate volatility. Value investing means buying stocks that are priced below what they are really worth. It works on the idea that markets often misprice stocks, giving investors a chance to buy low and profit later.
Focusing on companies with solid fundamentals and reasonable valuations can help investors find opportunities that balance stability with long-term return potential. Some such value stocks carrying high earnings yield include Aura Minerals Inc. (AUGO - Free Report) , Commercial Metals Company (CMC - Free Report) , Par Pacific Holdings (PARR - Free Report) and CorMedix Inc. (CRMD - Free Report) .
Unlock Value With Earnings Yield Metric
A simple tool that value investors use is earnings yield. It shows how much profit a company makes for each dollar of its stock price. Earnings yield, expressed in percentage, is calculated as (Annual Earnings per Share/Market Price) x 100. It is the reverse of the price-to-earnings (P/E) ratio. A high earnings yield may mean the stock is undervalued. A low yield could mean the stock is too expensive.
Investors can also use earnings yield to compare stocks with bond returns like the 10-year Treasury yield. If the stock market's earnings yield is higher than the bond yield, stocks might be more attractive. 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.
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.
Here, we have highlighted four of the 41 stocks that qualified the screening:
Aura Minerals is focused on the development and operation of gold and base metal projects principally in the Americas. The Zacks Consensus Estimate for AUGO’s 2025 and 2026 earnings implies year-over-year growth of 120.3% and 165.6%, respectively. EPS estimates for the current and next year have moved up by 6 cents and 96 cents, respectively, over the past 30 days. Aura Minerals currently sports a Zacks Rank #1 and has a Value Score of B.
Commercial Metals manufactures, recycles and markets steel and metal products, related materials and services. The Zacks Consensus Estimate for CMC’s fiscal 2026 sales and earnings implies year-over-year growth of 5% and 73%, respectively. EPS estimates for the current and next fiscal year have moved up by 18 cents and 48 cents, respectively, over the past seven days. Commercial Metals currently sports a Zacks Rank #1 and has a Value Score of B.
Par Pacific operates an integrated energy platform spanning refining, retail and logistics. The Zacks Consensus Estimate for PARR’s 2025 and 2026 earnings implies year-over-year growth of 951% and 24%, respectively. EPS estimates for the current and next year have moved up by $1.67 and 48 cents, respectively, over the past 30 days. Par Pacific currently sports a Zacks Rank #1 and has a Value Score of B.
CorMedix is a biopharmaceutical company focused on developing and commercializing therapeutic products for the prevention and treatment of infectious and inflammatory diseases. The Zacks Consensus Estimate for CRMD’s 2025 and 2026 earnings implies year-over-year growth of 717% and 34%, respectively. EPS estimates for the current and next year have moved up by 2 cents and 1 cent, respectively, over the past 30 days. CorMedix currently carries a Zacks Rank #2 and has a Value Score of B.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
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.
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4 High-Earnings Yield Value Picks Ahead of Potential Fed Rate Cut
Key Takeaways
Major U.S. stock market indices notched record highs yesterday as investors await the Federal Reserve’s policy decision. The Dow, the S&P 500 and the Nasdaq all hit fresh highs, with the S&P 500 climbing 0.23% to 6,890.89, after briefly topping the 6,900 mark for the first time ever.
Markets widely expect the Fed to announce another quarter-point rate cut today, followed by potential additional cuts in the coming months. Despite a slight uptick in September inflation, analysts believe the central bank will prioritize supporting a softening labor market over curbing price pressure. However, missing economic data amid the ongoing government shutdown could complicate policy signals.
In this environment of economic uncertainty, value investing offers a disciplined way to navigate volatility. Value investing means buying stocks that are priced below what they are really worth. It works on the idea that markets often misprice stocks, giving investors a chance to buy low and profit later.
Focusing on companies with solid fundamentals and reasonable valuations can help investors find opportunities that balance stability with long-term return potential. Some such value stocks carrying high earnings yield include Aura Minerals Inc. (AUGO - Free Report) , Commercial Metals Company (CMC - Free Report) , Par Pacific Holdings (PARR - Free Report) and CorMedix Inc. (CRMD - Free Report) .
Unlock Value With Earnings Yield Metric
A simple tool that value investors use is earnings yield. It shows how much profit a company makes for each dollar of its stock price. Earnings yield, expressed in percentage, is calculated as (Annual Earnings per Share/Market Price) x 100. It is the reverse of the price-to-earnings (P/E) ratio. A high earnings yield may mean the stock is undervalued. A low yield could mean the stock is too expensive.
Investors can also use earnings yield to compare stocks with bond returns like the 10-year Treasury yield. If the stock market's earnings yield is higher than the bond yield, stocks might be more attractive. 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.
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
Here, we have highlighted four of the 41 stocks that qualified the screening:
Aura Minerals is focused on the development and operation of gold and base metal projects principally in the Americas. The Zacks Consensus Estimate for AUGO’s 2025 and 2026 earnings implies year-over-year growth of 120.3% and 165.6%, respectively. EPS estimates for the current and next year have moved up by 6 cents and 96 cents, respectively, over the past 30 days. Aura Minerals currently sports a Zacks Rank #1 and has a Value Score of B.
Commercial Metals manufactures, recycles and markets steel and metal products, related materials and services. The Zacks Consensus Estimate for CMC’s fiscal 2026 sales and earnings implies year-over-year growth of 5% and 73%, respectively. EPS estimates for the current and next fiscal year have moved up by 18 cents and 48 cents, respectively, over the past seven days. Commercial Metals currently sports a Zacks Rank #1 and has a Value Score of B.
Par Pacific operates an integrated energy platform spanning refining, retail and logistics. The Zacks Consensus Estimate for PARR’s 2025 and 2026 earnings implies year-over-year growth of 951% and 24%, respectively. EPS estimates for the current and next year have moved up by $1.67 and 48 cents, respectively, over the past 30 days. Par Pacific currently sports a Zacks Rank #1 and has a Value Score of B.
CorMedix is a biopharmaceutical company focused on developing and commercializing therapeutic products for the prevention and treatment of infectious and inflammatory diseases. The Zacks Consensus Estimate for CRMD’s 2025 and 2026 earnings implies year-over-year growth of 717% and 34%, respectively. EPS estimates for the current and next year have moved up by 2 cents and 1 cent, respectively, over the past 30 days. CorMedix currently carries a Zacks Rank #2 and has a Value Score of B.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
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.