Zacks.com Featured Highlights Include: Sonic Automotive, Meritage Homes, Lithia, Guess? And Marathon
Zacks Investment Research | Nov 26, 2019 08:32PM ET
For Immediate Release
Chicago, IL – November 27, 2019 - Stocks in this week’s article are Sonic Automotive, Inc. (NYSE:SAH) , Meritage Homes Corp. (NYSE:MTH) , Lithia Motors (NYSE:LAD) , Guess? (NYSE:GES) and Marathon Petroleum Corp. (NYSE:MPC) .
5 High Earnings Yield Stocks to Boost Your Portfolio
If you are in two minds about bonds or stocks, you might want to consider earnings yield as a key parameter. It is the reciprocal of the price-to-earnings (P/E) ratio. This ratio is quite effective for determining undervalued stocks. It is also useful for comparing stocks with the market or fixed-income securities.
Earnings yield can be calculated as (annual earnings per share/market price) x 100. While comparing similar stocks, the one with high earnings yield should fetch higher returns.
This ratio is effective 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 said to be undervalued in comparison to bonds. This implies that investing in the stock market is a better option for a value investor.
However, while T-bills are free from risks, investing in stocks always carries its own share of perils. Hence, it will be wise to add a risk premium to the Treasury yield while comparing 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: Zacks Investment Research
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