Selecting stocks whose earnings return is more than double the monthly spot rate of the 20-year high-quality market corporate bonds assigns a higher likelihood to unearth high-return investments, in my opinion. These investment-grade bonds represent corporate loans issued by triple-A, double-A,and single-A rated companies.
Since these bonds yield a monthly spot rate of 2.84% as of the writing of this article, the following three stocks could be of interest to investors, as they are granting earnings returns of more than 5.68% at price-earnings ratios of less than 17.61.
Telefonica Brasil SA
Shares of Telefonica Brasil SA (VIV, Financial) were trading at $9.09 each at close on Wednesday for a market capitalization of $15.35 billion.
The São Paulo, Brazil-based telecommunication services provider grants an earnings return of 5.71% and has a price-earnings ratio of 17.52.
The share price has declined by 36.5% over the past year, determining a 52-week range of $7.08 to $10.26.
GuruFocus assigned a rating of 6 out of 10 for the company's financial strength and a rating of 7 out of 10 for its profitability.
Wall Street sell-side analysts recommend a median rating of overweight with an average target price of $11.25 per share for this stock.
Sturm Ruger & Co Inc
Shares of Sturm Ruger & Co Inc (RGR, Financial) were trading at a price of $65.84 each at close on Wednesday for a market capitalization of $1.15 billion.
The Southport, Connecticut-based manufacturer and seller of firearms in the United States grants an earnings return of 5.71% and has a price-earnings ratio of 17.51.
The stock has risen by 28.49% over the past year, determining a 52-week range of $38.44 to $90.70.
GuruFocus assigned a rating of 9 out of 10 for the company's financial strength and a rating of 7 out of 10 for its profitability.
Wall Street sell-side analysts recommend a median rating of overweight for this stock and have established an average target price of $81 per share.
Synovus Financial Corp
Shares of Synovus Financial Corp (SNV, Financial) were trading at $39.91 each at close on Wednesday for a market capitalization of $5.91 billion.
The Columbus, Georgia-based regional bank providing various financial products and services grants an earnings return of 5.74% and has a price-earnings ratio of 17.43.
The stock has risen by 8.63% over the past year for a 52-week range of $10.91 to $40.
GuruFocus assigned a rating of 7 out of 10 to the company's financial strength and a rating of 3 out of 10 to its profitability.
Wall Street sell-side analysts recommend a median rating of buy with an average target price of $42.96 per share for this stock.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- 3 Stocks With Low Forward Price-Earnings Ratios
- A Trio of Stocks With Appealing Price-Sales Ratios
- 3 Stocks That Could Represent Bargain Opportunities
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
