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

Their earnings yields have performed better than the market recently

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May 20, 2021
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When looking for high return investments amid non-cyclical stocks, investors could be interested in the three companies listed below, as their earnings yields (as calculated via

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

Greenblatt calculates the earnings yield as the company's earnings before interest and tax (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 the writing of this article, the S&P 500's historical high earnings yield was 9.8%. The following companies are performing better than the S&P 500 in terms of a higher earnings yield.

Bunge Ltd

The first stock investors could be interested in is Bunge Ltd (

BG, Financial), a St. Louis, Missouri-based global farm products company focusing on agricultural commodities and commodity products, as well as packaged and bulk oils and fats.

The stock offers an earnings yield of 15.70% as of the March 2021 quarter. This stands well above the median point of the past 10-year historical earnings yield range of -11.38% to 34.98%. Bunge Ltd.'s earnings yield ranks higher than 89% of 1,753 companies that are operating in the consumer packaged goods industry.

The share price traded at around $85.97 at close on Wednesday for a market capitalization of $12.16 billion and a 52-week range of $34.57 to $92.38. The stock climbed nearly 142% over the past year.

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Its price-earnings ratio is 5.88 and the price-book ratio is 2.03.

Currently, Bunge Ltd pays quarterly dividends. The company will distribute 50 cents per common share on June 2 (in line with the previous quarterly dividend) and 52.5 cents per common share on Sept. 2. As a result, the stock grants a trailing 12-month dividend yield of 2.31% and a forward dividend yield of 2.43% as of May 19.

On Wall Street, as of May, the stock has a median recommendation rating of overweight with an average target price of about $96.89 per share.

Among the top fund holders of the company, Vanguard Group Inc is the leader with 9.23% of shares outstanding. It is followed by Price T Rowe Associates Inc /Md/ and BlackRock Inc., holding 7.44% and 6.51%, respectively.

Leju Holdings Ltd

The second stock investors could be interested in is Leju Holdings Ltd (

LEJU, Financial), a Beijing, China-based provider of online to offline (O2O) real estate services to consumers in the People's Republic of China.

The company offers an earnings yield of 46.51% as of the December 2020 quarter. Leju Holdings' current earnings yield stands significantly above the median point of the 10-year historical range of -21,576.83% to 11,632.65% and ranks higher than 100% of the 1,798 companies that are operating in the real estate industry.

The share price was trading at around $1.95 at close on Wednesday for a market capitalization of $266.01 million and a 52-week range of $1.235 to $6.96. The stock has risen by 41.30% over the past year.

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Its price-earnings ratio is 14.56 and the price-book ratio is 0.88.

Currently, the company doesn't pay dividends, as the last distribution, 20 cents per common share, was made on May 15, 2015.

On Wall Street, as of May, the stock has one recommendation rating of hold with a target price of $3.60 per share.

Jim Simons (Trades, Portfolio) leads the group of top fund holders of the company with 1.06% of shares outstanding, followed by Acadian Asset Management LLC with 0.12% of shares outstanding and O'Shaughnessy Asset Management, LLC with 0.07% of shares outstanding.

Laboratory Corp of America Holdings

The third stock investors could be interested in is Laboratory Corp of America Holdings (

LH, Financial), a Burlington, North Carolina-based independent clinical laboratory company.

The company offers an earnings yield of 12.61% as of the March 2021 quarter. Currently, Laboratory Corp of America Holdings' earnings yield stands above the median point of the 10-year historical range of 3.24% to 13.3%, and it ranks higher than 92% of 243 companies that are operating in the medical diagnostics and research industry.

The share price traded at $267.04 at close on Wednesday for a market capitalization of $26.09 billion and a 52-week range of $155.6481 to $280.69. The stock has gained nearly 55% over the past year.

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Its price-earnings ratio is 9.94 and the price-book ratio is 2.60.

Currently, Laboratory Corp of America Holdings does not pay dividends. The last payment, a quarterly 20 cents per common share, was made on April 26, 1994.

On Wall Street, as of May, the stock has a median recommendation rating of buy with an average target price of $292.27 per share.

Vanguard Group dominates in the group of top fund holders of the company with 10.88% of shares outstanding. It is followed by BlackRock Inc. with 8.04% of shares outstanding and State Street Corp with 4.13% of shares outstanding.

Disclosure: I have no position in any security mentioned.

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