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4 High Earnings Yield Stocks That Value Investors Should Buy Now
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Last week, the Federal Reserve initiated its first rate cut in four years, lowering benchmark rates by half a percentage point. While this sparked some optimism on Wall Street, concerns about the global economy and U.S. markets persist. With the U.S. presidential election entering its final phase and other geopolitical factors at play, investors may face short-term market volatility. Investors should focus on value investing to weather uncertainties and capitalize on opportunities for growth.
Stocks like Pilgrim's Pride Corporation (PPC - Free Report) , Pfizer (PFE - Free Report) , IAMGOLD Corp. (IAG - Free Report) and AdvanSix Inc. (ASIX - Free Report) are a few value stocks with high earnings yield that you should invest in right away.
Understanding Earnings Yield Metric
Earnings yield is calculated by dividing a company's earnings per share (EPS) by its current stock price. The formula can be expressed as Earnings Yield = Earnings Per Share (EPS)/Current Stock Price.
This indicates the profitability of an investment, revealing the amount of profit generated per dollar invested in the stock. Essentially, earnings yield serves as the inverse of the price-to-earnings (P/E) ratio. A high earnings yield suggests that the stock may be undervalued, offering investors an opportunity for potential growth, while a low earnings yield may signal overvaluation, prompting caution among investors.
Moreover, earnings yield serves as a versatile tool for comparative analysis, allowing investors to compare market index performance with the 10-year Treasury yield. When the earnings yield of the market index surpasses the bond yield, it may signal favorable conditions for investing in stocks. This insight is particularly valuable for investors with diversified portfolios, encompassing both equities and bonds.
The Winning Strategy
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 discuss four of the 20 stocks that qualified the screening:
Pilgrim's Pride: The company isengaged in the processing, production, marketing and distribution of frozen, fresh as well as value-added chicken products. Strategic portfolio diversification, key customer partnerships, U.S. and Mexican investments, facility expansions, and cost-cutting measures fuel PPC’s prospects.
The Zacks Consensus Estimate for Pilgrim’s Pride 2024 earnings implies year-over-year growth of 183.4%. Estimates for 2024 and 2025 earnings per share have moved up by 54 cents and 57 cents, respectively, over the past 60 days. PPC currently sports a Zacks Rank #1 and has a Value Score of A.
Pfizer: It is one of the largest and most successful drugmakers in the field of oncology. PFE’s new products/late-stage pipeline candidates, coupled with newly acquired products, including those acquired from Seagen, position Pfizer strongly for operational growth in 2025 and beyond.
The Zacks Consensus Estimate for Pfizer’s 2024 earnings implies year-over-year growth of 42.4%. Estimates for 2024 and 2025 earnings per share have moved up by 24 cents and 11 cents, respectively, over the past 60 days. PFE currently carries a Zacks Rank #2 and has a Value Score of B.
IAMGOLD: It is an international gold exploration and mining company based in Canada. IAG holds a 38% stake in the Sadiola Gold Mine and a 40% stake in the Yatela Gold Mine. Sadiola and Yatela hold 5.5 million ounces of gold (including 5.2 million in reserves) with 5.9 million ounces inferred. IAG is actively exploring promising areas in Africa and South America.
The Zacks Consensus Estimate for IAMGOLD’s 2024 earnings implies year-over-year growth of 433.3%. Estimates for 2024 and 2025 earnings per share have moved up by 3 cents and 7 cents, respectively, over the past seven days. IAG currently sports a Zacks Rank #1 and has a Value Score of B.
AdvanSix: The company is a manufacturer of nylon 6 resin, chemical intermediates and ammonium sulfate fertilizer. It is benefiting from its differentiated product portfolio, exposure to diverse end markets and favorable demand and pricing. ASIX is expected to gain from improved nylon demand conditions and the growth of its differentiated products.
The Zacks Consensus Estimate for ASIX’s 2024 and 2025 sales implies year-over-year growth of 2% and 8%, respectively. Estimates for 2024 and 2025 earnings per share have moved up by 41 cents and 17 cents, respectively, over the past 60 days. AdvanSix 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.
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4 High Earnings Yield Stocks That Value Investors Should Buy Now
Last week, the Federal Reserve initiated its first rate cut in four years, lowering benchmark rates by half a percentage point. While this sparked some optimism on Wall Street, concerns about the global economy and U.S. markets persist. With the U.S. presidential election entering its final phase and other geopolitical factors at play, investors may face short-term market volatility. Investors should focus on value investing to weather uncertainties and capitalize on opportunities for growth.
Stocks like Pilgrim's Pride Corporation (PPC - Free Report) , Pfizer (PFE - Free Report) , IAMGOLD Corp. (IAG - Free Report) and AdvanSix Inc. (ASIX - Free Report) are a few value stocks with high earnings yield that you should invest in right away.
Understanding Earnings Yield Metric
Earnings yield is calculated by dividing a company's earnings per share (EPS) by its current stock price. The formula can be expressed as Earnings Yield = Earnings Per Share (EPS)/Current Stock Price.
This indicates the profitability of an investment, revealing the amount of profit generated per dollar invested in the stock. Essentially, earnings yield serves as the inverse of the price-to-earnings (P/E) ratio. A high earnings yield suggests that the stock may be undervalued, offering investors an opportunity for potential growth, while a low earnings yield may signal overvaluation, prompting caution among investors.
Moreover, earnings yield serves as a versatile tool for comparative analysis, allowing investors to compare market index performance with the 10-year Treasury yield. When the earnings yield of the market index surpasses the bond yield, it may signal favorable conditions for investing in stocks. This insight is particularly valuable for investors with diversified portfolios, encompassing both equities and bonds.
The Winning Strategy
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 discuss four of the 20 stocks that qualified the screening:
Pilgrim's Pride: The company isengaged in the processing, production, marketing and distribution of frozen, fresh as well as value-added chicken products. Strategic portfolio diversification, key customer partnerships, U.S. and Mexican investments, facility expansions, and cost-cutting measures fuel PPC’s prospects.
The Zacks Consensus Estimate for Pilgrim’s Pride 2024 earnings implies year-over-year growth of 183.4%. Estimates for 2024 and 2025 earnings per share have moved up by 54 cents and 57 cents, respectively, over the past 60 days. PPC currently sports a Zacks Rank #1 and has a Value Score of A.
Pfizer: It is one of the largest and most successful drugmakers in the field of oncology. PFE’s new products/late-stage pipeline candidates, coupled with newly acquired products, including those acquired from Seagen, position Pfizer strongly for operational growth in 2025 and beyond.
The Zacks Consensus Estimate for Pfizer’s 2024 earnings implies year-over-year growth of 42.4%. Estimates for 2024 and 2025 earnings per share have moved up by 24 cents and 11 cents, respectively, over the past 60 days. PFE currently carries a Zacks Rank #2 and has a Value Score of B.
IAMGOLD: It is an international gold exploration and mining company based in Canada. IAG holds a 38% stake in the Sadiola Gold Mine and a 40% stake in the Yatela Gold Mine. Sadiola and Yatela hold 5.5 million ounces of gold (including 5.2 million in reserves) with 5.9 million ounces inferred. IAG is actively exploring promising areas in Africa and South America.
The Zacks Consensus Estimate for IAMGOLD’s 2024 earnings implies year-over-year growth of 433.3%. Estimates for 2024 and 2025 earnings per share have moved up by 3 cents and 7 cents, respectively, over the past seven days. IAG currently sports a Zacks Rank #1 and has a Value Score of B.
AdvanSix: The company is a manufacturer of nylon 6 resin, chemical intermediates and ammonium sulfate fertilizer. It is benefiting from its differentiated product portfolio, exposure to diverse end markets and favorable demand and pricing. ASIX is expected to gain from improved nylon demand conditions and the growth of its differentiated products.
The Zacks Consensus Estimate for ASIX’s 2024 and 2025 sales implies year-over-year growth of 2% and 8%, respectively. Estimates for 2024 and 2025 earnings per share have moved up by 41 cents and 17 cents, respectively, over the past 60 days. AdvanSix 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.
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.