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4 Non-Cyclical Stocks With High Returns

These stocks may suit the value investor

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Feb 20, 2022
Summary
  • Enel Chile, Fresh Del Monte Produce, Acme United and Sendas Distribuidora 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 taxes 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 3.36% as of the time of writing.

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).

Enel Chile

The first stock investors may want to consider is the Chilean distributor of electricity, Enel Chile SA (

ENIC, Financial).

The stock grants an earnings yield of 17.06% as of the June 2021 quarter. This stands above the median point of the past 10-year historical earnings yield range of -3.53% to 25.08%. The earnings yield ranks higher than 87% of 530 companies that are operating in the utilities-regulated industry.

The stock traded at around $1.80 on Friday, giving it a market cap of $2.49 billion and a 52-week range of $1.75 to $4.09.

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Its price-earnings ratio is 5.62 and its price-book ratio is 0.60.

The stock grants a forward dividend yield of 0.35% as of Feb. 18.

Fresh Del Monte Produce

The second stock investors may want to consider is Fresh Del Monte Produce Inc. (

FDP, Financial), a Cayman Islands-based producer, marketer and distributor of fresh and fresh-cut fruits and vegetables worldwide.

The company grants an earnings yield of 5.28% as of the September 2021 quarter. This stands slightly below the median point of the 10-year historical range of -0.82% to 9.8% and ranks higher than 56% of the 1,797 companies that are operating in the consumer packaged goods industry.

The stock traded around $28.81 on Friday, giving it a market cap of $1.37 billion and a 52-week range of $24.10 to $36.57.

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Its price-earnings ratio is 14.85 and its price-book ratio is 0.76.

The stock grants a forward dividend yield of 2.08% as of Feb. 18.

Acme United

The third stock investors may want to consider is Acme United Corp. (

ACU, Financial), a Fairfield, Connecticut-based supplier of first aid, measuring and safety products as well as cutting and sharpening tools to households, offices and schools in North America. The company serves several industrial markets as well.

The company grants an earnings yield of 9.65% as of the September 2021 quarter, standing well above the median point of the 10-year historical range of 5.2% to 11.48% and ranking higher than 73% of 1,797 companies that are operating in the consumer packaged goods industry.

The stock traded at $33.79 on Friday, giving it a market cap of $120.28 million and a 52-week range of $29.82 to $48.31.

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Its price-earnings ratio is 9.94 and its price-book ratio is 1.57.

The stock grants a forward dividend yield of 1.54% as of Feb. 18.

Sendas Distribuidora

The fourth stock investors may want to consider is Sendas Distribuidora S.A. (

ASAI, Financial), a Rio De Janeiro, Brazil-based operator of 185 grocery stores and 10 distribution centers.

The company grants an earnings yield of 6.97% as of the September 2021 quarter, standing near the median point of the 10-year historical range of 6.14% to 9.99% and ranking higher than 73% of 293 companies that are operating in the retail-defensive industry.

The stock traded at $12.43 on Friday, giving it a market cap of $3.35 billion and a 52-week range of $9.73 to $18.55.

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Its price-earnings ratio is 7.05 and the price-book ratio is 7.21.

The stock grants a forward dividend yield of 0.85% as of Feb. 18.

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Disclosures

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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