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Alberto Abaterusso
Alberto Abaterusso
Articles (2532) 

3 High Earnings Yield Stocks to Consider

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

September 15, 2020 | About:

Choosing stocks whose earnings yield is more than double the monthly spot rate of the 20-year high-quality market corporate bonds enhances the likelihood to unearth high-return investments, in my opinion. This category of investment-grade bonds represents corporate loans issued by triple-A, double-A and single-A rated companies.

Since the monthly spot rate of the bonds stands at 2.83% as of July 2020, the following three stocks may hold value, as they offer earnings yields of more than 5.7% at price-earnings ratios of less than 17.7.

General Electric Co

Shares of General Electric Co (NYSE:GE) were trading at $6.15 per unit at close on Monday for a market capitalization of $53.83 billion.

The Boston, Massachusetts-based multinational high technology industrial company offers an earnings yield of 6% and has a price-earnings (PE) without non-recurring items (NRI) ratio of 16.62.

The share price has fallen by 34.4% over the past year for a 52-week range of $5.48 to $13.26.

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

Wall Street sell-side analysts recommend an overweight rating for this stock and have established an average target price of $8.18 per share.

BrightSphere Investment Group Inc

Shares of BrightSphere Investment Group Inc (NYSE:BSIG) traded at a price of $13.31 per unit at close on Monday for a market capitalization of $1.07 billion.

The Boston, Massachusetts-based asset management company, serving its clients through separate specifically dedicated portfolios or equity mutual funds, offers an earnings yield of 16.7% and has a PE without NRI ratio of 6.

The stock has risen by 26.3% over the past year, determining a 52-week range of $3.61 to $14.61.

GuruFocus assigned a moderate rating of 4 out of 10 to the company's financial strength and a positive rating of 6 out of 10 to its profitability.

Wall Street sell-side analysts recommend an overweight rating for this stock and have produced an average target price of $16.50 per share.

GAMCO Investors Inc

Shares of GAMCO Investors Inc (NYSE:GBL) were trading at $13.16 each at close on Monday for a market capitalization of $363.09 million.

The Rye, New York-based investment and asset management company, providing its clients with a broad range of financial services, offers an earnings yield of 17.1% and has a PE without NRI ratio of 5.85.

The stock has fallen 34.4% over the past year, determining a 52-week range of $9.03 to $20.31.

GuruFocus assigned a very good rating of 7 out of 10 to both the company's financial strength and its profitability.

Wall Street sell-side analysts recommend a buy rating for this stock.

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 how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. 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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