A Trio of High-Return, Non-Cyclical Stocks for the Value Investor

Their earnings yields have topped the market recently

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Alberto Abaterusso
Apr 22, 2021
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If you are screening the market for high-return investments, you may want to consider the three non-cyclical stocks listed below, as their earnings yields (as calculated via

Joel Greenblatt (Trades, Portfolio)'s method) are topping the U.S. market.

Greenblatt calculates the earnings yield as the company's earnings before interest and taxes (Ebit) divided by its enterprise value. This ratio represents a more reliable reference for the appraisal of non-cyclical stocks, whose earnings have little or no correlation with the business cycle (as the metric only looks at 12 months of operations).

As of April 22, the following stocks' earnings yields are performing higher than the S&P 500's past seven years' peak of 9.5%.

Meridian Bioscience

The first stock to consider is Meridian Bioscience Inc. (

VIVO, Financial), a Cincinnati, Ohio-based developer and distributor of test kits to diagnose several infectious diseases and abnormal levels of lead in the blood.

The stock offers an earnings yield of 11.38% as of the December 2020 quarter. This stands above the median point of the past 10-year historical earnings yield range of 3.65% to 11.54%. Meridian Bioscience's earnings yield ranks higher than 91% of 244 companies that are operating in the medical diagnostics and research industry.

The stock closed at $22.43 on Wednesday for a market capitalization of $969.90 million and a 52-week range of $8.18 to $30.65. The stock has risen 112.58% over the past year.

Its price-earnings ratio is 13.88 and the price-book ratio is 3.48.

Meridian Bioscience has not paid quarterly dividends since 2019, but, on Feb. 14, distributed the last 12.5 cents per common share.

On Wall Street as of April, the stock has a median recommendation rating of buy with an average target price of about $40 per share.

Among the top fund holders of the company, BlackRock Inc. is the leader with 15.88% of shares outstanding, followed by Vanguard Group Inc. with 11.03% and

Jim Simons (Trades, Portfolio)' Renaissance Technologies with 5.36%.

Enel Americas

The second stock to consider is Enel Americas SA (

ENIA, Financial), a Chilean electric utility company with operating activities in South America.

The company offers an earnings yield of about 12.2% as of the December 2020 quarter. Enel Americas' current earnings yield stands below the median point of the 10-year historical range of 10.9% to 50.83% and is more compelling compared to the industry median of 5.84%. The regulated utilities industry, which is composed by approximately 524 companies, has a median earnings yield of 5.84%.

The stock closed at $7.85 on Wednesday, nearly flat compared to year-ago levels, for a market capitalization of $11.96 billion and a 52-week range of $6.22 to $8.94.

Its price-earnings ratio is 12.95 and the price-book ratio is 1.38.

On Feb. 9, the company distributed a semiannual cash dividend of 4.7 cents per common share, an 89.6% fall from the previous one, leading to a trailing 12-month dividend yield of 6.34% and a forward dividend yield of 1.2% as of April 21.

On Wall Street as of April, the stock has a median recommendation rating of overweight with an average target price of $10.55 per share.

State Street Corp. and BlackRock are among the largest fund holders of the company, owning 0.28% and 0.27% of shares outstanding.

Fulgent Genetics

The third stock to consider is Fulgent Genetics Inc. (

FLGT, Financial), a Temple City, California-based provider of coronavirus and genetic testing services, producing clinically actionable diagnostic information for physicians.

The company offers an earnings yield of 24.51% as of the December 2020 quarter. Currently, Fulgent Genetics' earnings yield stands significantly above the median point of the 10-year historical range of -25.13% to 32.81%, and it ranks higher than 93% of 244 companies that are operating in the medical diagnostics and research industry.

The share price was trading at $87.65 at close on Wednesday for a market capitalization of $2.57 billion and a 52-week range of $8.36 to $189.89. The stock has risen by 472.62% over the past year.

Its price-earnings ratio is 10.80 and the price-book ratio is 4.39.

Currently, Fulgent Genetics does not pay dividends.

On Wall Street as of April, the stock has a median recommendation rating of hold with an average target price of $107 per share.

BlackRock dominates in the group of top fund holders of the company with 8.18% of shares outstanding. It is followed by Vanguard Group with 3.68% of shares outstanding and Invesco Ltd. with 2.78% of shares outstanding.

Disclosure: I have no positions in any securities mentioned.

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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