For Immediate Release
Chicago, IL – September 28, 2018 - Stocks in this week’s article are Steel Dynamics, Inc. (STLD - Free Report) , Nucor Corp. (NUE - Free Report) , D.R. Horton, Inc. (DHI - Free Report) and Rayonier Advanced Materials Inc. (RYAM - Free Report) .
4 High Earnings Yield Stocks to Enhance Your Portfolio
If you are not sure about whether to put your money in stocks or bonds, one important financial parameter that can show you the right direction is earnings yield. It is the reciprocal of the price-to-earnings (P/E) ratio. This ratio can be used for figuring out undervalued stocks. Also, this ratio is useful for comparing stocks with the market or fixed income securities.
Earnings yield can be defined as (Annual Earnings per Share/Market Price) x 100. While comparing similar stocks, the one with high earnings yield should give higher returns.
This ratio is handy for comparing the performance of the market with the 10-year Treasury yield. When the yield of the market index is higher than the 10-year Treasury yield, stocks can be regarded as undervalued in comparison to bonds. This means that investing in the stock market is a better option for a value investor.
However, while T-bills are free of risks, investing in stocks always involves some inherent risks. Hence, it would be wise to add a risk premium to the Treasury yield while making comparison with the earnings yield of a stock or the broader market.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/325119/4-high-earnings-yield-stocks-to-enhance-your-portfolio
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