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For Immediate Release
Chicago, IL – December 14, 2017 - Stocks in this week’s article POSCO (NYSE:PKX) , Tata Motors Limited (NYSE:TTM) , TRI Pointe Group, Inc. (NYSE:TPH) and Triton International Limited (NYSE:TRTN) .
4 High Earnings Yield Stocks to Strengthen Your Portfolio
There are some financial parameters that are very important in taking wise investment decision. Sometimes, investors are not sure whether to keep their money in stocks or bonds. In such cases, proper selection of financial metrics can show the right direction.
One such financial metric is earnings yield. It is the reciprocal of the price-to-earnings (P/E) ratio. In fact, this ratio is very useful in finding out undervalued stocks. It is also very handy for making a comparative analysis with the market or fixed income securities.
Earnings yield is measured as (Annual Earnings per Share/Market Price) x 100. This is very useful in comparing stocks coming from same sector or industry. The stock with higher earnings yield is likely to produce better returns.
This ratio can also be used for comparing the performance of a market index with the 10-year Treasury yield. When the yield of the market index is more than the 10-year Treasury yield, the stocks can be considered as undervalued in comparison to bonds. This gives an indication that investing in the stock market is a better option for a value investor.
Treasury-bills investment is free of risks. However, investing in stocks always comes with a caveat. Hence, it is an excellent idea to add a risk premium to Treasury yield while comparing it with the earnings yield of a stock or the broader market.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/285764/4-high-earnings-yield-stocks-to-strengthen-your-portfolio
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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