For Immediate Release
Chicago, IL – January 31, 2020 – Stocks in this week’s article are TEGNA Inc.
TGNA, Genesco Inc. GCO, Devon Energy Corp. DVN, Credit Suisse Group CS and KB Home ( KBH Quick Quote KBH - Free Report) . Scoop Up These High Earnings Stocks for a Standout Portfolio
Earnings yield is a useful ratio for investors who have exposure to both stocks and bonds. This ratio gains an upper hand over the more commonly used P/E ratio as it facilitates comparison of stocks with fixed-income securities. Interestingly, it is simply the inverse of P/E ratio.
Earnings yield is calculated as (Annual Earnings per Share/Market Price) x 100. If other factors are constant while comparing stocks, the one with a higher earnings yield has the potential to provide comparatively greater returns. That’s because this metric measures the anticipated yield (or return) from earnings for each dollar invested in a stock today.
Earnings yield can also be used to compare the performance of a market index with the 10-year Treasury yield. For instance, when the yield of the market index is more than the 10-year Treasury yield, stocks can be considered as undervalued than bonds. In this situation, investing in the stock market would be a better option for a value investor.
However, you need to keep in mind that T-bills are risk free, while 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 overall market.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/740489/scoop-up-these-high-earnings-stocks-for-a-standout-portfolio 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. About Screen of the Week
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