Choosing stocks whose earnings return is more than twice the monthly spot rate of the 20-year high-quality market corporate bonds grants a higher chance to unearth high-return investments, in my opinion. This class of investment-grade bonds represents corporate loans issued by triple-A, double-A and single-A rated companies.
Since these bonds give a monthly spot rate of 2.96% as of October 2020, the following three stocks may be of interest to investors, as they offer earnings returns of more than 5.9% at price-earnings ratios of less than 17.
Intel Corp
Shares of Intel Corp (INTC, Financial) were trading at $48.20 per unit at close on Friday for a market capitalization of $197.52 billion.
The Santa Clara, California-based semiconductor company gives an earnings return of 11.3% and has a price-earnings (PE) without non-recurring items (NRI) ratio of 8.85.
The share price has fallen by 15% over the past year for a 52-week range of $43.63 to $69.29.
GuruFocus assigned a rating of 6 out of 10 for the company's financial strength and of 9 out of 10 for its profitability.
Wall Street sell-side analysts recommend a hold rating for this stock and have set an average target price of $54.55 per share.
Whirlpool Corp
Shares of Whirlpool Corp (WHR, Financial) traded at a price of $198.11 each at close on Friday for a market capitalization of $12.39 billion.
The Benton Harbor, Michigan-based home appliances producer and marketer gives an earnings return of 6.96% and has a PE without NRI ratio of 14.37.
The stock has risen by 28.2% over the past year, determining a 52-week range of $64 to $207.30.
GuruFocus assigned a rating of 5 out of 10 to the company's financial strength and of 7 out of 10 to its profitability.
Wall Street sell-side analysts recommend a hold rating for this stock and have produced an average target price of $210.14 per share.
MDU Resources Group Inc
Shares of MDU Resources Group Inc (MDU, Financial) were trading at $24.77 per unit at close on Friday for a market capitalization of $4.97 billion.
The Bismarck, North Dakota-based distributor of regulated electricity and gas, which is also a producer and seller of construction materials, gives an earnings return of 7.2% and has a PE without NRI ratio of 13.92.
The stock has fallen 11.6% over the past year, determining a 52-week range of $15 to $32.22.
GuruFocus assigned a rating of 5 out of 10 to the company's financial strength and of 6 out of 10 to its profitability.
Wall Street sell-side analysts recommend an overweight rating for this stock and have established an average target price of $28.33 per share.
Disclosure: I have no positions in any securities mentioned.
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