A Trio of Stocks With High Earnings Returns

These companies' earnings returns are more than double the monthly spot rate of 20-year high-quality market corporate bonds

Author's Avatar
Sep 26, 2022
Summary
  • Energy Transfer LP, ConocoPhillips and Truist Financial Corp. have high earnings returns.
  • Wall Street also recommends these stocks.
Article's Main Image

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 4.79% as of the time of writing, the following stocks could be of interest to investors since their earnings returns are more than 9.58% and their price-earnings ratios are below 10.44. They also hold high ratings from Wall Street analysts.

Energy Transfer LP

As of Sept. 23, Energy Transfer LP (

ET, Financial), a Dallas, Texas-based oil and gas midstream operator in the U.S., offered an earnings yield of 11.86% and had a price-earnings ratio of 8.43.

Energy Transfer LP’s shares traded at $10.54 apiece, giving the stock a market cap of approximately $32.54 billion. The stock has risen 9.45% over the past year for a 52-week range of $7.96 to $12.49.

1573926216581365760.png

Energy Transfer LP's diluted earnings per share from continuing operations were $1.27 for the 12 months ended June 2022, representing a slight decline of 6.6% from diluted earnings per share of $1.36 for the same period ended June 2021.

On Aug. 19, the company paid a quarterly dividend of 23 cents per common share, which translates to a payout ratio of about 54%. The distribution results in a trailing 12-month dividend yield of 7.19% and a forward dividend yield of 8.73% as of this writing.

GuruFocus has given the company a rating of 4 out of 10 for financial strength and 7 out of 10 for profitability.

Wall Street issued a median recommendation rating of buy with an average target price of $15.75 per share for the stock.

Blackstone Inc. is the company's top fund holder with 6.05% of shares outstanding. Goldman Sachs Group Inc. is the second-largest shareholder at 3.01%, while Alerian MLP ETF follows in third place with 2.07%.

ConocoPhillips

As of Sept. 23, ConocoPhillips (

COP, Financial), a Houston, Texas-based fossil fuel miner from deposits in North America and overseas, offered an earnings yield of 12.03% and had a price-earnings ratio of around 8.31.

The shares of ConocoPhillips traded at around $100.59 each, giving the stock a market cap of approximately $128.05 billion. The stock price has risen 50.79% over the past year for a 52-week range of $63.54 to $124.08.

1573931416234868736.png

ConocoPhillips' diluted earnings per share from continuing operations for the 12 months ended June 2022 was $12.08, a nearly eight-fold jump from diluted earnings per share of $1.53 for the same period through June 2021.

On Oct. 14, the company will pay shareholders a variable cash return (VROC) of $1.40 per share for the fourth quarter of 2022. To benefit, shareholders must be on the company's books by Sept. 29 at the latest.

On Sept. 1, the company paid a quarterly dividend of 46 cents per common share, which translates to a payout ratio of about 25%. The stock grants a trailing 12-month dividend yield of 1.91% and a forward dividend yield of 1.91%, as of this writing.

GuruFocus has given the company a rating of 7 out of 10 for financial strength and 4 out of 10 for profitability.

Wall Street issued a median recommendation rating of buy for the stock with an average target price of approximately $126.44 per share.

Vanguard Group Inc. is the company's largest fund holder with 8.86% of outstanding shares. BlackRock Inc. is the second largest shareholder with 8%, while State Street Corp. is third with 5%.

Truist Financial Corp

As of Sept. 23, Truist Financial Corp. (

TFC, Financial), a Charlotte, North Carolina-based regional bank for individuals and various organizations in the Southeastern and the Mid-Atlantic United States, offered an earnings yield of 9.95% and had a price-earnings ratio of 10.05.

Shares of Truist Financial Corp. traded at around $44.34 each at close on Sept. 23, giving the stock a market cap of approximately $58.81 billion. The stock price has fallen 26.8% over the past year for a 52-week range of $43.54 to $68.95.

1573938342809157632.png

Truist Financial Corp.’s diluted earnings per share from continuing operations for the 12 months ended June 2022 was $4.41, representing an increase of 15.14% from diluted earnings per share of $3.83 for the same period through June 2021.

On Sept. 1, the company paid a quarterly dividend of 52 cents per common share, resulting in a payout ratio of approximately 44%. The trailing 12-month dividend yield was 4.42% and the forward dividend yield was 4.69% at the time of writing.

GuruFocus has given the company a rating of 3 out of 10 for financial strength and 6 out of 10 for profitability.

Wall Street issued a median recommendation rating of overweight with an average target price of $55.73 per share for the stock.

Vanguard Group Inc. is the company's largest fund holder with 9.03% of the outstanding shares. BlackRock Inc. is the second largest shareholder with 7.28%, while JPMorgan Chase & Co is third with 4.66%.

Become a Premium Member to See This: (Free Trial):

» Take a Free Trial of Premium Membership

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
Rating:
0 / 5 (0 votes)
Author's Avatar
WRITTEN BY

Request A Demo

Learn more about GuruFocus' key features, including All-In-One Screener, backtesting, 30-year financial, stock summary page, guru trades, insider trades, excel Add-in, google sheets and much more.

GuruFocus Screeners

Related Articles