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5 High Earnings Yield Stocks to Boost Your Portfolio Value
Investors frequently use P/E ratio and other valuation indicators to identify stocks that are potentially undervalued and offer strong growth prospects. Another intriguing ratio that can be employed is the earnings yield.
Earnings yield, expressed in percentage, is calculated as (Annual Earnings per Share/Market Price) x 100. While comparing stocks, if other factors are similar, investors can look out for stocks with higher earnings yield. This is because stocks with higher earnings yield have the potential to provide comparatively greater returns.
Commercial Vehicle Group, Urban Outfitters Inc., Mr. Cooper Group Inc., DMC Global Inc. and GigaCloud Technology Inc. are some stocks boasting high earnings yield.
Just like the case with dividend yield, firms with higher earnings yield are considered underpriced, while those with lower earnings yield are seen as overpriced. Earnings yield captures both the tangible and intangible yield of a firm, as opposed to dividend yield, which only takes into account the tangible yield.
Importantly, 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 undervalued than bonds. In this situation, investing in the stock market would be a better option for a value investor.
Earnings Yield: Simply the Inverse of P/E
Earnings yield is nothing but the reciprocal of one of the most popular valuation metrics, i.e., the P/E ratio (stock price/earnings per share). In fact, as the concept of earnings yield is already indirectly captured in the P/E ratio, earnings yield as an investment valuation metric is not as widely used as the P/E ratio.
Having said that, it should be noted that earnings yield is an important tool for investors with exposure to both stocks and bonds. In fact, 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.
Here we discuss five of the 24 stocks that qualified the screen:
Commercial Vehicle supplies interior systems, vision safety solutions and other cab-related products for the global commercial vehicle market, the construction market and other specialized transportation markets. The Zacks Consensus Estimate for CVGI's 2023 and 2024 earnings implies year-over-year growth of 102% and 12%, respectively. Estimates for 2023 and 2024 earnings per share have moved up by 8 cents and 6 cents, respectively, over the past 30 days. Commercial Vehicle currently sports a Zacks Rank #1 and has a Value Score of A.
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gift products. The Zacks Consensus Estimate for URBN's fiscal 2024 and 2025 earnings implies year-over-year growth of 82% and 6%, respectively. Estimates for fiscal 2024 and 2025 earnings per share have moved up by 38 cents each over the past 30 days. The stock currently sports a Zacks Rank #1 and has a Value Score of A.
Mr. Cooper provides quality servicing, origination and transaction-based services principally to single-family residences, primarily in the United States. The Zacks Consensus Estimate for COOP's 2023 and 2024 earnings implies year-over-year growth of 174.8% and 30%, respectively. Estimates for 2023 and 2024 earnings per share have moved up by 99 cents and $1.32, respectively, over the past 60 days. The stock currently sports a Zacks Rank #1 and has a Value Score of A.
DMC Global is a leading worldwide provider of engineered products used for construction, energy, industrial processing and transportation markets. The Zacks Consensus Estimate for BOOM's 2023 and 2024 earnings implies year-over-year growth of 200% and 26%, respectively. Estimates for 2023 and 2024 earnings per share have moved up by 24 cents and 25 cents, respectively, over the past 30 days. DMC Global currently sports a Zacks Rank #1 and has a Value Score of A.
GigaCloud Technology provides end-to-end B2B e-commerce solutions for big parcel merchandise worldwide. The Zacks Consensus Estimate for GCT's 2023 and 2024 earnings implies year-over-year growth of 165% and 6.3%, respectively. Estimates for 2023 and 2024 earnings per share have moved up by 20 cents and 12 cents, respectively, over the past 30 days. The stock currently sports a Zacks Rank #1 and has a Value Score of A.
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.
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
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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.
See More Zacks Research for These Tickers
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Zacks.com featured highlights include Commercial Vehicle Group, Urban Outfitters, Mr. Cooper Group, DMC Global and GigaCloud Technology
For Immediate Release
Chicago, IL – September 5, 2023 – Stocks in this week’s article are Commercial Vehicle Group (CVGI - Free Report) , Urban Outfitters Inc. (URBN - Free Report) , Mr. Cooper Group Inc. (COOP - Free Report) , DMC Global Inc. (BOOM - Free Report) and GigaCloud Technology Inc. (GCT - Free Report) .
5 High Earnings Yield Stocks to Boost Your Portfolio Value
Investors frequently use P/E ratio and other valuation indicators to identify stocks that are potentially undervalued and offer strong growth prospects. Another intriguing ratio that can be employed is the earnings yield.
Earnings yield, expressed in percentage, is calculated as (Annual Earnings per Share/Market Price) x 100. While comparing stocks, if other factors are similar, investors can look out for stocks with higher earnings yield. This is because stocks with higher earnings yield have the potential to provide comparatively greater returns.
Commercial Vehicle Group, Urban Outfitters Inc., Mr. Cooper Group Inc., DMC Global Inc. and GigaCloud Technology Inc. are some stocks boasting high earnings yield.
Just like the case with dividend yield, firms with higher earnings yield are considered underpriced, while those with lower earnings yield are seen as overpriced. Earnings yield captures both the tangible and intangible yield of a firm, as opposed to dividend yield, which only takes into account the tangible yield.
Importantly, 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 undervalued than bonds. In this situation, investing in the stock market would be a better option for a value investor.
Earnings Yield: Simply the Inverse of P/E
Earnings yield is nothing but the reciprocal of one of the most popular valuation metrics, i.e., the P/E ratio (stock price/earnings per share). In fact, as the concept of earnings yield is already indirectly captured in the P/E ratio, earnings yield as an investment valuation metric is not as widely used as the P/E ratio.
Having said that, it should be noted that earnings yield is an important tool for investors with exposure to both stocks and bonds. In fact, 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.
Here we discuss five of the 24 stocks that qualified the screen:
Commercial Vehicle supplies interior systems, vision safety solutions and other cab-related products for the global commercial vehicle market, the construction market and other specialized transportation markets. The Zacks Consensus Estimate for CVGI's 2023 and 2024 earnings implies year-over-year growth of 102% and 12%, respectively. Estimates for 2023 and 2024 earnings per share have moved up by 8 cents and 6 cents, respectively, over the past 30 days. Commercial Vehicle currently sports a Zacks Rank #1 and has a Value Score of A.
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gift products. The Zacks Consensus Estimate for URBN's fiscal 2024 and 2025 earnings implies year-over-year growth of 82% and 6%, respectively. Estimates for fiscal 2024 and 2025 earnings per share have moved up by 38 cents each over the past 30 days. The stock currently sports a Zacks Rank #1 and has a Value Score of A.
Mr. Cooper provides quality servicing, origination and transaction-based services principally to single-family residences, primarily in the United States. The Zacks Consensus Estimate for COOP's 2023 and 2024 earnings implies year-over-year growth of 174.8% and 30%, respectively. Estimates for 2023 and 2024 earnings per share have moved up by 99 cents and $1.32, respectively, over the past 60 days. The stock currently sports a Zacks Rank #1 and has a Value Score of A.
DMC Global is a leading worldwide provider of engineered products used for construction, energy, industrial processing and transportation markets. The Zacks Consensus Estimate for BOOM's 2023 and 2024 earnings implies year-over-year growth of 200% and 26%, respectively. Estimates for 2023 and 2024 earnings per share have moved up by 24 cents and 25 cents, respectively, over the past 30 days. DMC Global currently sports a Zacks Rank #1 and has a Value Score of A.
GigaCloud Technology provides end-to-end B2B e-commerce solutions for big parcel merchandise worldwide. The Zacks Consensus Estimate for GCT's 2023 and 2024 earnings implies year-over-year growth of 165% and 6.3%, respectively. Estimates for 2023 and 2024 earnings per share have moved up by 20 cents and 12 cents, respectively, over the past 30 days. The stock currently sports a Zacks Rank #1 and has a Value Score of A.
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.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2143428/5-high-earnings-yield-stocks-to-boost-your-portfolio-value
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
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
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Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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.