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Alberto Abaterusso
Alberto Abaterusso
Articles (2203) 

3 High Earnings Return Stocks to Consider

Their yields beat the 20-year high quality market corporate bonds

May 14, 2020 | About:

Picking stocks that more than double the earnings return that 20-year high-quality corporate bonds are giving to their holders could be of help to unearth value opportunities, in my opinion. Holders of these bonds, which represent corporate loans issued by triple-A, double-A and single-A companies, are currentlybeing offered at a 3.26% monthly return.

The following stocks have earnings returns of more than 6.52% and price-earnings ratios standing below 15.34.

Honeywell International Inc

Shares of Honeywell International Inc (NYSE:HON) traded at a price of $122.97 per unit at close on Wednesday for a market capitalization of $86.31 billion.

The Charlotte, North Carolina-based global diversified technology and manufacturing company offers an earnings yield of 7.08% and has a price-earnings ratio of 14.13.

The share price has declined by 30.5% so far this year, but Wall Street sell-side analysts predict that it will bounce back up to the price target of $153.57 per share, gaining nearly 25% from Wednesdays closing price.

GuruFocus assigned a positive rating of 6 out of 10 for the company's financial strength and a higher rating of 8 out of 10 for its profitability.

Cummins Inc

Shares of Cummins Inc (NYSE:CMI) traded at a price of $147.68 per unit at close on Wednesday for a market capitalization of $21.79 billion.

The Columbus, Indiana-based manufacturer and distributor of diesel and natural gas powered engines to several industries worldwide offers an earnings yield of 9.23% and has a price-earnings ratio of 10.84.

The share price has declined by 17.5% so far this year. However, Wall Street sell-side analysts forecast that it will rebound strongly and hit the price target of $168.19 per share, marking an almost 14% growth from Wednesdays closing price.

GuruFocus assigned a positive rating of 6 out of 10 for the companys financial strength and a high rating of 9 out of 10 for its profitability.

Rogers Communications Inc

Shares of Rogers Communications Inc (NYSE:RCI) traded at a price of $39.59 per unit at close on Wednesday for a market capitalization of $20.19 billion.

The Canadian telecommunication services company offers an earnings yield of 6.96% and a price-earnings ratio of 14.36.

The share price has declined by 20.3% so far this year. However, Wall Street sell-side analysts predict that it will outperform and have set an average target price of $47.06, which represents a nearly 20% upside from Wednesday's closing price.

GuruFocus assigned the stock a low rating of 3 out of 10 for its financial strength and a high rating of 9 out of 10 for its profitability.

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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