1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Alberto Abaterusso
Alberto Abaterusso
Articles (2263) 

A Trio of High Earnings Yield Stocks for the Value Investor

They outperform the yield on 20-year high quality market corporate bonds

August 07, 2020 | About:

Selecting stocks whose earnings return is more than twice the average of 20-year high-quality corporate bonds enhances the chances to find high-yield investments, in my opinion. This category of investment grade bonds represents corporate loans that triple-A, double-A and single-A rated companies have taken out with their lenders.

Since 20-year high-quality corporate bonds grant a monthly spot rate of 3.18% (as of June 2020) to their holders, the following three stocks may hold value, as they grant earnings returns of more than 6.36% at price-earnings ratios of less than 15.72.

SLM Corp

Shares of SLM Corp (NASDAQ:SLM) were trading at $6.87 each at close on Thursday for a market capitalization of $2.58 billion.

The Newark, Delaware-based provider of education loans to support students and their families in financing the cost of the education in the U.S. grants an earnings return of 18.2% and has a price-earnings ratio of 5.5.

The share price has lost nearly 20% over the past year, determining a 52-week range of $5.60 to $12.32.

GuruFocus assigned a low rating of 3 out of 10 for the company's financial strength and a moderate rating of 4 out of 10 for the profitability.

Wall Street sell-side analysts recommend an overweight rating for this stock and have established an average target price of $9.77 per share.

E*TRADE Financial Corp

Shares of E*TRADE Financial Corp (NASDAQ:ETFC) were trading at a price of $51.38 per unit at close on Thursday for a market capitalization of $11.36 billion.

The New York-based online financial broker grants an earnings return of 6.68% and has a price-earnings ratio of 14.96.

The stock has risen by nearly 20% over the past year for a 52-week range of $25.76 to $57.30.

GuruFocus assigned a low rating of 3 out of 10 to the company’s financial strength and a moderate rating of 4 out of 10 to its profitability. 

Wall Street sell-side analysts recommend a hold rating for the stock and have set an average target price of $52.50 per share.

Fox Corp

Shares of Fox Corp (NASDAQ:FOX) were trading at $25.16 per unit at close on Thursday for a market capitalization of $15.13 billion.

The New York-based news, sports and entertainment company in the U.S. grants an earnings return of 6.44% and has a price-earnings ratio of 15.54.

The stock has declined by 28.1% over the past year for a 52-week range of $19.13 to $38.91.

GuruFocus assigned a positive rating of 5 out of 10 to the company’s financial strength and a moderate rating of 4 out of 10 to its profitability.

Wall Street sell-side analysts recommend an overweight recommendation rating for the stock and have produced an average target price of $29.11 per share.

Disclosure: I have no positions in any securities mentioned.

Read more here:

 Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.

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

Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:



Performances of the stocks mentioned by Alberto Abaterusso


User Generated Screeners


pjmason14Momentum
pascal.van.garsseHigh FCF-M2
kosalmmuse6
kosalmmuseBest one1
DBrizanall 2019Feb26
kosalmmuseBest one
DBrizanall 2019Feb25
kosalmmuseNice
kosalmmusehan
MsDale*52-Week Low
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)