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Time to Buy These 5 Value Stocks With High Earnings Yield
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Markets are on edge as tariff concerns escalate and rate cuts remain elusive. With global trade tensions rattling supply chains and the Fed holding firm on rates, volatility is expected to continue. In times like these, value investing — seeking fundamentally strong stocks trading below their intrinsic worth — is one of the best strategies to identify solid opportunities amid the chaos.
One interesting ratio that you can consider for ferreting out attractively valued stocks is earnings yield. Stocks like Dana Incorporated (DAN - Free Report) , Ingevity Corporation (NGVT - Free Report) , Compania de Minas Buenaventura S.A.A. Inc. (BVN - Free Report) , Noble Corporation (NE - Free Report) and Suzano S.A. (SUZ - Free Report) boast impressive earnings yield to help you fetch handsome long-term rewards.
Earnings Yield Strength
Earnings yield, expressed in percentage, is calculated as annual earnings per share (EPS) divided by market price. This metric measures the anticipated yield (or return) from earnings for each dollar invested in a stock today. While comparing stocks, if other factors are similar, the ones with higher earnings yield are considered undervalued, while those with lower earnings yield are seen as overpriced.
While earnings yield is nothing but the reciprocal of the P/E ratio, it is a little more illuminating than the traditional P/E ratio as 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. In this situation, investing in the stock market would be a better option for a value investor.
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.
We have highlighted five of the 49 stocks that qualified the screening:
Dana is a provider of power conveyance and energy-management solutions for vehicles and machinery in North America, Europe, South America and the Asia Pacific. The Zacks Consensus Estimate for DAN’s 2025 earnings implies year-over-year growth of 79%. Estimates for 2025 earnings per share have moved up by 20 cents over the past 30 days. Dana currently sports a Zacks Rank #1 and has a Value Score of A.
Ingevity is a global producer of high-performance activated carbon materials and specialty chemicals. The Zacks Consensus Estimate for NGVT’s 2025 earnings implies year-over-year growth of 62%. Estimates for 2025 earnings per share have moved up by $1 over the past 30 days. Ingevity currently sports a Zacks Rank #1 and has a Value Score of B.
Buenaventura engages in the exploration, development, construction and operation of mineral processing business. The Zacks Consensus Estimate for BVN’s 2025 earnings implies year-over-year growth of 30.5%. Estimates for 2025 earnings per share have moved up by 3 cents over the past 30 days. Buenaventura currently sports a Zacks Rank #1 and has a Value Score of B.
Noble is an offshore drilling contractor specializing in ultra-deepwater and high-specification jackup drilling services for the oil and gas industry. The Zacks Consensus Estimate for NE’s 2025 earnings implies year-over-year growth of 22%. Estimates for 2025 earnings per share have moved up by 8 cents over the past 30 days. Noble currently sports a Zacks Rank #1 and has a Value Score of A.
Suzano is one of the largest vertically integrated producers of eucalyptus pulp and paper. The Zacks Consensus Estimate for SUZ’s 2025 earnings implies year-over-year growth of 395%. Estimates for 2025 earnings per share have moved up by 21 cents over the past 30 days. Suzano 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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Time to Buy These 5 Value Stocks With High Earnings Yield
Markets are on edge as tariff concerns escalate and rate cuts remain elusive. With global trade tensions rattling supply chains and the Fed holding firm on rates, volatility is expected to continue. In times like these, value investing — seeking fundamentally strong stocks trading below their intrinsic worth — is one of the best strategies to identify solid opportunities amid the chaos.
One interesting ratio that you can consider for ferreting out attractively valued stocks is earnings yield. Stocks like Dana Incorporated (DAN - Free Report) , Ingevity Corporation (NGVT - Free Report) , Compania de Minas Buenaventura S.A.A. Inc. (BVN - Free Report) , Noble Corporation (NE - Free Report) and Suzano S.A. (SUZ - Free Report) boast impressive earnings yield to help you fetch handsome long-term rewards.
Earnings Yield Strength
Earnings yield, expressed in percentage, is calculated as annual earnings per share (EPS) divided by market price. This metric measures the anticipated yield (or return) from earnings for each dollar invested in a stock today. While comparing stocks, if other factors are similar, the ones with higher earnings yield are considered undervalued, while those with lower earnings yield are seen as overpriced.
While earnings yield is nothing but the reciprocal of the P/E ratio, it is a little more illuminating than the traditional P/E ratio as 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. In this situation, investing in the stock market would be a better option for a value investor.
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
We have highlighted five of the 49 stocks that qualified the screening:
Dana is a provider of power conveyance and energy-management solutions for vehicles and machinery in North America, Europe, South America and the Asia Pacific. The Zacks Consensus Estimate for DAN’s 2025 earnings implies year-over-year growth of 79%. Estimates for 2025 earnings per share have moved up by 20 cents over the past 30 days. Dana currently sports a Zacks Rank #1 and has a Value Score of A.
Ingevity is a global producer of high-performance activated carbon materials and specialty chemicals. The Zacks Consensus Estimate for NGVT’s 2025 earnings implies year-over-year growth of 62%. Estimates for 2025 earnings per share have moved up by $1 over the past 30 days. Ingevity currently sports a Zacks Rank #1 and has a Value Score of B.
Buenaventura engages in the exploration, development, construction and operation of mineral processing business. The Zacks Consensus Estimate for BVN’s 2025 earnings implies year-over-year growth of 30.5%. Estimates for 2025 earnings per share have moved up by 3 cents over the past 30 days. Buenaventura currently sports a Zacks Rank #1 and has a Value Score of B.
Noble is an offshore drilling contractor specializing in ultra-deepwater and high-specification jackup drilling services for the oil and gas industry. The Zacks Consensus Estimate for NE’s 2025 earnings implies year-over-year growth of 22%. Estimates for 2025 earnings per share have moved up by 8 cents over the past 30 days. Noble currently sports a Zacks Rank #1 and has a Value Score of A.
Suzano is one of the largest vertically integrated producers of eucalyptus pulp and paper. The Zacks Consensus Estimate for SUZ’s 2025 earnings implies year-over-year growth of 395%. Estimates for 2025 earnings per share have moved up by 21 cents over the past 30 days. Suzano 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.