Looking for stocks whose earnings returns are more than double the monthly spot rate of 20-year high-quality market corporate bonds could provide more opportunities to discover high-return investments. The investment-grade bonds represent corporate loans issued by triple-A, double-A and single-A rated companies.
Since these bonds are offering a monthly spot rate of 4.85% as of the time of writing, the following stocks could be of interest to investors since their earnings returns are more than 9.7% and their price-earnings ratios are below 10.31. They also hold high ratings from Wall Street analysts.
Exxon Mobil Corp
Ahead of regular trading hours on Aug. 11, Exxon Mobil Corp. (XOM, Financial), an Irving, Texas-based crude oil and natural gas producer, offered an earnings yield of 9.99% and had a price-earnings ratio of 10.01.
Exxon Mobil’s shares traded at $91.45 apiece, giving the stock a market cap of approximately $381.13 billion. The stock has risen 43.93% over the past year for a 52-week range of $52.10 to $105.57.
Exxon Mobil's earnings per share from continuing operations were $9.14 for the twelve months ended June 2022, a positive reversal from the net loss of $3.12 for the same period ended June 2021.
On Sept. 9, the company will pay a quarterly dividend of 88 cents per common share, which translates to a payout ratio of about 38%. The distribution results in a trailing 12-month dividend yield of 3.85% and a forward dividend yield of 3.87%, as of this writing.
GuruFocus has given the company a rating of 8 out of 10 for financial strength, 7 out of 10 for profitability and 7 out of 10 for value.
Wall Street issued a median recommendation rating of overweight with an average target price of $106.67 per share for the stock.
Vanguard Group Inc. is the company's top fund holder with 8.62% of shares outstanding. BlackRock Inc. is the second-largest shareholder at 6.51%, while State Street Corp. follows in third place with 5.94%.
JPMorgan Chase & Co.
Ahead of regular trading hours on Aug. 11, U.S. bank giantJPMorgan Chase & Co. (JPM, Financial) offered an earnings yield of 10.53% and had a price-earnings ratio of around 9.5.
The shares of JPMorgan Chase & Co. traded around $118.39 each, giving the stock a market cap of approximately $347.19 billion. The stock price has dropped 26.82% over the past year for a 52-week range of $106.06 to $172.96.
The earnings per share from continuing operations were $12.49 for the 12 months ended June 2022, down from $15.02 for the same period ended June 2021.
On July 31, the company paid a quarterly dividend of $1 per common share, representing a payout ratio of approximately 32%. The distribution results in trailing 12-month and forward dividend yields of 3.38% at the time of writing.
GuruFocus has given the company a rating of 3 out of 10 for financial strength, 6 out of 10 for profitability and 9 out of 10 for value.
Wall Street issued a median recommendation rating of overweight for the stock with an average target price of approximately $136.70 per share.
Vanguard Group Inc. is the company's largest fund holder with 9.09% of outstanding shares. BlackRock Inc. is the second largest shareholder with 6.87%, while State Street Corp. is third with 4.79%.
Citizens Financial Group Inc.
Ahead of regular trading hours on Aug. 11,Citizens Financial Group Inc (CFG, Financial), a Providence, Rhode Island-based consumer and corporate bank, offered an earnings yield of 10.29% and had a price-earnings ratio of 9.72.
Shares of Citizens Financial Group traded around $38.41 each on Aug. 11, giving the stock a market cap of approximately $19.04 billion. The stock price has fallen 15.21% over the past year for a 52-week range of $34.35 to $57.
The earnings per share from continuing operations were $3.92 for the 12 months ended June 2022, down from $4.50 for the same period ended June 2021.
On Aug. 16, the company will pay a quarterly dividend of 42 cents per common share, resulting in a payout ratio of approximately 40%. The trailing 12-month dividend yield is 4.14% and the forward dividend yield is 4.37% at the time of writing.
GuruFocus has given the company a rating of 3 out of 10 for financial strength, 5 out of 10 for profitability and 9 out of 10 for value.
Wall Street issued a median recommendation rating of overweight with an average target price of $46.53 per share for the stock.
Vanguard Group Inc. is the company's largest fund holder with 9.86% of the outstanding shares. BlackRock Inc. is the second largest shareholder with 8.24%, while Capital International Investors is third with 5.70%.
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