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Alberto Abaterusso
Alberto Abaterusso
Articles (2203) 

These Stocks Recently Granted High Earnings Yields

Their earnings returns beat the 20-Year high-quality market corporate bonds monthly spot rate

February 24, 2020 | About:

In order to find value opportunities, investors may want to look at stocks whose earnings returns have beaten the returns of 20-year high-quality market corporate bonds.

These bonds offer their holders a 3.35% monthly spot rate. Also, as these securities represent corporate loans issued by triple-A, double-A and single-A-rated companies, they entail a very low investment risk for both bondholders and shareholders.

Thus, investors may want to look at the following stocks, since their earnings returns have recently outperformed the spot rate of 20-year high-quality market corporate bonds by more than 50%.

Tegna

Shares of Tegna Inc (NYSE:TGNA) traded at a price of $16.94 per unit at close on Friday for a market capitalization of $3.67 billion.

The Tysons, Virginia-based media company operator grants an earnings return of 7.73% and a price-earnings ratio of 12.93.

The share price is down about 6.2% over the past five years through Feb. 21 and is now slightly below the Peter Lynch earnings line, suggesting that the stock is not expensive.

GuruFocus assigned a low rating of 3 out of 10 for the company's financial strength but a high rating of 8 out of 10 for its profitability.

The stock offers a forward dividend yield of 1.65% as of Friday.

Wall Street issued an overweight recommendation rating for this stock with an average target price of $18.75 per share.

Universal Logistics

Shares of Universal Logistics Holdings Inc (NASDAQ:ULH) traded at a price of $18.72 per unit on Friday for a market capitalization of $510.72 million.

The Warren, Michigan-based provider of transportation and logistics solutions in North and Central America and Colombia offers an earnings yield of 7.1% and a price-earnings ratio of 14.08.

The share price has declined 25% over the past five years through Feb. 21. The below chart shows that the stock trades cheaply, as its share price is below the Peter Lynch earnings line.

GuruFocus assigned a moderate rating of 4 out of 10 for the companys financial strength and a high rating of 8 out of 10 for its profitability.

The stock offers a forward dividend yield of 2.24% as of Friday.

Wall Street recommends an overweight rating for this stock and has set an average target price of $28.33 per share.

Alliance Data Systems

Shares of Alliance Data Systems Corp (NYSE:ADS) traded at a price of $102.16 per unit on Friday with a market capitalization of $4.71 billion.

The Columbus, Ohio-based global provider of data-driven marketing and loyalty solutions grants earnings return of 5.83% and a price-earnings ratio of 17.15.

The share price has fallen by 63% over the past five years through Feb. 21 and is now trading below the Peter Lynch earnings line, which indicates that the stock is cheap.

GuruFocus assigned the stock a moderate rating of 4 out of 10 for its financial strength and a very high rating of 9 out of 10 for its profitability.

The stock grants a 2.47% forward dividend yield as of Friday.

Wall Street recommends an overweight rating for this stock and has established an average target price of $125.73 per share.

Disclosure: I have no positions in any securities mentioned.

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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about gold, silver and precious metals mining industries. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master's Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

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