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4 High Return Non-Cyclical Stocks

These stocks may suit the value investor

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Nov 08, 2021
Summary
  • UGI Corp, Kellogg Co, Spectrum Brands Holdings Inc and Philip Morris International Inc have earnings yields topping the 20-year high quality market corporate bond spot rate
  • Greenblatt calculates the earnings yield as the company's earnings before interest and tax divided by its enterprise value
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Investors may want to consider the following non-cyclical stocks, as their earnings yields (as calculated via

Joel Greenblatt (Trades, Portfolio)'s method) are outperforming the 20-year high quality market corporate bond spot rate of 3% as of the writing of this article.

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 evaluation of non-cyclical stocks, whose earnings have little or no correlation with the business cycle (as the metric only looks at 12 months of business activities).

UGI Corp

The first stock investors may want to consider is UGI Corp (

UGI, Financial), a King of Prussia, Pennsylvania-based distributor of energy products in the U.S. and internationally.

The stock grants an earnings yield of 10.06% as of the June 2021 quarter. This stands above the median point of the past 10-year historical earnings yield range of 4.15% to 11.86%. UGI Corp's earnings yield ranks higher than 92% of 126 companies that are operating in the utilities-regulated industry.

The share price was trading at around $44.64 at close on Friday for a market capitalization of $9.33 billion and a 52-week range of $33.65 to $48.55.

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Its price-earnings ratio is 9.85 and its price-book ratio is 1.92.

Currently, UGI Corp pays quarterly dividends with a trailing 12-month dividend yield of 3.02% and a forward dividend yield of 3.09% as of Nov. 5.

Kellogg Co.

The second stock investors may want to consider is Kellogg Co. (

K, Financial), a Battle Creek, Michigan-based global manufacturer and marketer of ready-to-eat cereal and convenience foods.

The company grants an earnings yield of 6.49% as of the June 2021 quarter. This stands above the median point of the 10-year historical range of 1.89% to 10.08% and ranks higher than 65% of the 160 companies that are operating in the consumer-packaged goods industry.

The share price was trading at around $62.56 at close on Friday for a market capitalization of $21.33 billion and a 52-week range of $56.61 to $68.60.

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Its price-earnings ratio is 16.55 and its price-book ratio is 6.34.

Currently, Kellogg Co. pays quarterly dividends with a trailing 12-month dividend yield of 3.68% and a forward dividend yield of 3.71% as of Nov. 5.

Spectrum Brands Holdings Inc

The third stock investors may want to consider is Spectrum Brands Holdings Inc (

SPB, Financial), a Middleton, Wisconsin-based manufacturer of a broad range of products for home, home improvement, personal, pet care and garden products.

The company grants an earnings yield of 7.34% as of the June 2021 quarter, standing well above the median point of the 10-year historical range of -7.04% to 15.58% and ranking higher than 76% of 160 companies that are operating in the consumer-packaged goods industry.

The share price was trading at $96.75 at close on Friday for a market capitalization of $4.11 billion and a 52-week range of $60.13 to $99.34.

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Its price-earnings ratio is 22.50 and the price-book ratio is 2.75.

Currently, Spectrum Brands Holdings Inc pays quarterly dividends with a trailing 12-month and forward dividend yield of 3.74% as of Nov. 5.

Philip Morris International Inc

The third stock investors may want to consider is Philip Morris International Inc (

PM, Financial), a New York-based tobacco giant.

The company grants an earnings yield of 7.42% as of the September 2021 quarter, standing slightly below the median point of the 10-year historical range of 5.02% to 10.59% and ranking higher than 52.17% of 46 companies that are operating in the tobacco industry.

The share price was trading at $94.30 at close on Friday for a market capitalization of $146.81 billion and a 52-week range of $71.58 to $106.51.

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Its price-earnings ratio is 16.37 and the price-sales ratio is 4.79.

Currently, Philip Morris International Inc pays quarterly dividends with a trailing 12-month dividend yield of 5.14% and a forward dividend yield of 5.3% as of Nov. 5.

Disclosure: I have no positions in any securities mentioned.

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I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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