We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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 to Buy as AI Volatility Reshapes the Market
Read MoreHide Full Article
Key Takeaways
CVE, MU, SNDK, HPE and HMC qualified a screen for high earnings yield and buy-rated value stocks.
Earnings yield above 10% was paired with EPS growth, liquidity and price filters to find value picks.
The five picks show projected EPS growth, with estimates rising over recent weeks.
The U.S. market has entered November with renewed volatility, as investors question whether the massive spending on artificial intelligence will ultimately produce meaningful revenues and profits. Persistent inflation and elevated long-term yields have also made borrowing more expensive, forcing investors to reassess the valuations of high-growth companies. The Democrats’ midterm sweep adds fresh policy uncertainty. Meanwhile, oil prices and tensions in the Middle East could stoke inflation fears and market sentiment.
In this environment, value investing offers a prudent approach. It focuses on businesses with tangible earnings, reasonable valuations and resilient cash flows rather than speculative narratives. Buying strong businesses at prices below what they are actually worth builds in a cushion, which can help a portfolio hold up when markets swing.
Earnings yield is an interesting ratio that you can consider for picking attractively valued stocks. This metric, expressed in percentage, is calculated as annual earnings per share (EPS) divided by market price. It measures the anticipated return from earnings for each dollar invested in a stock today. When comparing stocks, if other factors are similar, the ones with a higher earnings yield are considered undervalued, while those with a lower earnings yield are seen as overpriced.
While earnings yield is nothing but the reciprocal of the P/E ratio, 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.
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 34 stocks that qualified the screen:
Cenovus Energy: This Canadian energy company is riding on a visible production growth plan, disciplined project execution and an integrated upstream-to-refining network.The Zacks Consensus Estimate for CVE’s 2026 sales and EPS implies year-over-year growth of 24% and 168%, respectively. EPS estimates for the current year and the next have moved up by 55 cents and 93 cents, respectively, over the past 30 days. Cenovus Energy currently sports a Zacks Rank #1 and has a Value Score of A.
Micron: This semiconductor stock with significant AI exposure benefits from strategic customer agreements, an optimal product mix, and higher selling prices. The Zacks Consensus Estimate for MU’s fiscal 2027 sales and EPS implies year-over-year growth of 108% and 135%, respectively. EPS estimates for the current fiscal year have moved up by $1.12 over the past 30 days. Micron currently sports a Zacks Rank #1 and has a Value Score of B.
Sandisk: This NAND flash storage company is benefiting from strong demand for enterprise SSDs across hyperscalers and AI infrastructure customers. The Zacks Consensus Estimate for SNDK’s fiscal 2027 sales and EPS implies year-over-year growth of 143% and 204%, respectively. EPS estimates for the current fiscal year have moved up by $2.44 over the past 30 days. Sandisk currently carries a Zacks Rank #2 and has a Value Score of A.
Hewlett Packard:This enterprise infrastructure company is benefiting from a broader shift toward AI servers, networking modernization and hybrid cloud. The Zacks Consensus Estimate for HPE’s fiscal 2026 and 2027 EPS implies year-over-year growth of 97% and 23%, respectively. EPS estimates for the current and the next fiscal year have moved up by 1 cent and 4 cents, respectively, over the past 30 days. Hewlett Packard currently carries a Zacks Rank #2 and has a Value Score of B.
Honda: This Japanese auto giant is benefiting from strong demand for hybrid vehicles and its high-margin motorcycle business. The Zacks Consensus Estimate for HMC’s fiscal 2027 and 2028 EPS implies year-over-year growth of 209% and 58%, respectively. EPS estimates for the current and the next fiscal year have moved up by 3 cents and 4 cents, respectively, over the past 30 days. Honda currently carries a Zacks Rank #2 and has a Value Score of A.
View the Zacks #1 Rank List
Image: Bigstock
5 Value Stocks to Buy as AI Volatility Reshapes the Market
Key Takeaways
The U.S. market has entered November with renewed volatility, as investors question whether the massive spending on artificial intelligence will ultimately produce meaningful revenues and profits. Persistent inflation and elevated long-term yields have also made borrowing more expensive, forcing investors to reassess the valuations of high-growth companies. The Democrats’ midterm sweep adds fresh policy uncertainty. Meanwhile, oil prices and tensions in the Middle East could stoke inflation fears and market sentiment.
In this environment, value investing offers a prudent approach. It focuses on businesses with tangible earnings, reasonable valuations and resilient cash flows rather than speculative narratives. Buying strong businesses at prices below what they are actually worth builds in a cushion, which can help a portfolio hold up when markets swing.
Cenovus Energy Inc. (CVE - Free Report) , Micron Technology (MU - Free Report) , Sandisk Corporation (SNDK - Free Report) , Hewlett Packard Enterprise (HPE - Free Report) and Honda Motor (HMC - 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 picking attractively valued stocks. This metric, expressed in percentage, is calculated as annual earnings per share (EPS) divided by market price. It measures the anticipated return from earnings for each dollar invested in a stock today. When comparing stocks, if other factors are similar, the ones with a higher earnings yield are considered undervalued, while those with a lower earnings yield are seen as overpriced.
While earnings yield is nothing but the reciprocal of the P/E ratio, 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.
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 34 stocks that qualified the screen:
Cenovus Energy: This Canadian energy company is riding on a visible production growth plan, disciplined project execution and an integrated upstream-to-refining network.The Zacks Consensus Estimate for CVE’s 2026 sales and EPS implies year-over-year growth of 24% and 168%, respectively. EPS estimates for the current year and the next have moved up by 55 cents and 93 cents, respectively, over the past 30 days. Cenovus Energy currently sports a Zacks Rank #1 and has a Value Score of A.
Micron: This semiconductor stock with significant AI exposure benefits from strategic customer agreements, an optimal product mix, and higher selling prices. The Zacks Consensus Estimate for MU’s fiscal 2027 sales and EPS implies year-over-year growth of 108% and 135%, respectively. EPS estimates for the current fiscal year have moved up by $1.12 over the past 30 days. Micron currently sports a Zacks Rank #1 and has a Value Score of B.
Sandisk: This NAND flash storage company is benefiting from strong demand for enterprise SSDs across hyperscalers and AI infrastructure customers. The Zacks Consensus Estimate for SNDK’s fiscal 2027 sales and EPS implies year-over-year growth of 143% and 204%, respectively. EPS estimates for the current fiscal year have moved up by $2.44 over the past 30 days. Sandisk currently carries a Zacks Rank #2 and has a Value Score of A.
Hewlett Packard:This enterprise infrastructure company is benefiting from a broader shift toward AI servers, networking modernization and hybrid cloud. The Zacks Consensus Estimate for HPE’s fiscal 2026 and 2027 EPS implies year-over-year growth of 97% and 23%, respectively. EPS estimates for the current and the next fiscal year have moved up by 1 cent and 4 cents, respectively, over the past 30 days. Hewlett Packard currently carries a Zacks Rank #2 and has a Value Score of B.
Honda: This Japanese auto giant is benefiting from strong demand for hybrid vehicles and its high-margin motorcycle business. The Zacks Consensus Estimate for HMC’s fiscal 2027 and 2028 EPS implies year-over-year growth of 209% and 58%, respectively. EPS estimates for the current and the next fiscal year have moved up by 3 cents and 4 cents, respectively, over the past 30 days. Honda currently carries a Zacks Rank #2 and has a Value Score of A.