Selecting stocks that more than double the earnings yield that 20-year high-quality corporate bonds are offering to their holders could be a method to find value opportunities, in my opinion. This category of investment grade bonds represents corporate loans that have been issued by triple-A, double-A and single-A companies.
Since 20-year high-quality corporate bonds have a monthly spot rate of 3.34% as of May 2020, the following three stocks may hold value, as they offer earnings yields of more than 6.68% and price-earnings ratios below 14.97.
CRA International Inc
Shares of CRA International Inc (CRAI, Financial) closed at a price of $37.93 each on Thursday for a market capitalization of $295.45 million.
The Boston, Massachusetts-based provider of economic, financial and management consulting services to businesses in the U.S. and internationally offers an earnings yield of 7.33% and has a price-earnings ratio of 13.64.
The share price has risen 3.7% over the past year for a 52-week range of $21.96 to $58.19.
GuruFocus assigned a positive rating of 5 out of 10 to the company's financial strength and another positive rating of 6 out of 10 also for its profitability.
Wall Street sell-side analysts issued an overweight recommendation rating for this stock and have established an average target price of $68 per share.
Curtiss-Wright Corp
Shares of Curtiss-Wright Corp (CW, Financial) closed at a price of $91.93 each on Thursday for a market capitalization of $3.83 billion.
The Davidson, North Carolina-based manufacturer and supplier of components to several industries and markets worldwide offers an earnings yield of 7.69% and has a price-earnings ratio of 13.
The share price has fallen 24% over the past year, determining a 52-week range of $70.56 to $149.90.
GuruFocus assigned a positive rating of 6 out of 10 to the company’s financial strength and a high rating of 8 out of 10 to its profitability.
Wall Street sell-side analysts issued a buy recommendation rating for this stock and have set an average target price of $127.80 per share.
Levi Strauss & Co
Shares of Levi Strauss & Co (LEVI, Financial) closed at a price of $13.78 each on Thursday for a market capitalization of $5.46 billion.
The San Francisco, California-based apparel company offers an earnings yield of 7.11% and has a price-earnings ratio of 14.06.
The share price has fallen 36.7% over the past year for a 52-week range of $9.09 to $24.50.
GuruFocus assigned the stock a positive rating of 5 out of 10 for its financial strength and another positive rating of 6 out of 10 also for its profitability.
Wall Street sell-side analysts issued an overweight recommendation rating for this stock and have established an average target price of $17 per share.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- 3 Low Forward Price-Earnings Ratio Stocks for the Value Investor
- 3 Stocks With Low Price-Sales Ratios
- 3 Stocks Growing Capex Fast
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here
