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4 Non-Cyclical Stocks With High Returns

These stocks may suit value investors

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Apr 02, 2022
Summary
  • OGE Energy, Industrias Bachoco, Vita Coco and Nature's Sunshine Products 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 by

Joel Greenblatt (Trades, Portfolio)'s method) are outperforming the 20-year high-quality market corporate bond spot rate of 3.70% 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 to no correlation with the business cycle (as the metric only looks at 12 months of business activities).

OGE Energy

The first stock investors may want to consider is OGE Energy Corp. (

OGE, Financial), an Oklahoma City-based energy and energy services provider with infrastructure and business operations in Oklahoma and Arkansas.

The stock grants an earnings yield of 8.19% as of the December 2021 quarter. This stands above the midpoint of the past 10-year historical earnings yield range of -1.99% to 8.56%. The earnings yield ranks higher than 60% of 521 companies that are operating in the utilities-regulated industry.

The stock traded at around $41.28 on Friday, giving it a market cap of $8.26 billion and a 52-week range of $32.10 to $41.28.

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Its price-earnings ratio is 11.25 and its price-book ratio is 2.04.

The stock granted a forward dividend yield of 3.97% as of April 1.

Industrias Bachoco

The second stock investors may want to consider is Industrias Bachoco SAB de CV (

IBA, Financial), a Mexican producer of poultry in the U.S. and Mexico.

The company grants an earnings yield of 23.31% as of the December 2021 quarter. This stands slightly below the midpoint of the 10-year historical range of 6.22% to 41.74% and ranks higher than 93% of the 1,801 companies that are operating in the consumer packaged goods industry.

The stock traded around $46.56 on Friday, giving it a market cap of $2.33 billion and a 52-week range of $36.98 to $47.80.

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Its price-earnings ratio is 9.15 and its price-book ratio is 0.97.

The stock granted a forward dividend yield of 1.83% as of April 1.

Vita Coco

The third stock investors may want to consider is The Vita Coco Co. Inc. (

COCO, Financial), a New York-based distributor of coconut water products under the Vita Coco brand name in North America and internationally.

The company grants an earnings yield of 4.15% as of the December 2021 quarter, standing slightly below the midpoint of the 10-year historical range of 2.3% to 7.71% and ranking lower than 68% of 103 companies that are operating in the non-alcoholic beverages industry.

The stock traded at around $9.11 on Friday, giving it a market cap of $506.14 million and a 52-week range of $7.51 to $18.61.

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Its price-earnings ratio is 52.36 and its price-book ratio is 4.11.

Vita Coco does not pay dividends.

Nature's Sunshine Products

The fourth stock investors may want to consider is Nature's Sunshine Products Inc. (

NATR, Financial), a Lehi, Utah-based manufacturer and seller of nutritional and personal care products in North America and internationally.

The company grants an earnings yield of 10.52% as of the December 2021 quarter, below the midpoint of the 10-year historical range of 0.96% to 24.99% and ranking higher than 80% of 1,801 companies that are operating in the consumer packaged goods industry.

The stock traded at $17.20 on Friday, giving it a market cap of $334.52 million and a 52-week range of $13.85 to $21.50.

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Its price-earnings ratio is 12.03 and its price-book ratio is 2.14.

Currently, Nature's Sunshine Products does not pay dividends.

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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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