3 High-Earnings Yield Stocks
In This Article:
- By Alberto Abaterusso
I often screen for companies that are outperforming 20-year high-quality market corporate bonds in terms of a higher earnings yield. Such research increases the chances of discovering a value stock. These bonds are securities representing the corporate loan issued by companies that are triple-A, double-A and single-A rated.
The most recent monthly observation on the spot rate of the 20-year bond is indicating a 4.57% yield. Here are the results of my screen.
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Warning! GuruFocus has detected 2 Warning Signs with FMCC. Click here to check it out.
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The intrinsic value of FMCC
Federal Home Loan Mortgage Corp. (FMCC) has an earnings yield of 43.7%. The McLean, Virginia-based financial services company is active in the secondary market for mortgages. Shares of Federal Home Loan Mortgage Corp. were trading around $2.57 on Friday. The market capitalization is $1.67 billion. The stock has increased 52% for the 52 weeks through Feb. 15. The share price at close Friday was 162.2% above the 52-week low 98 cents and 19.1% from the 52-week high of $3.06. The stock has a price-sales ratio of 0.53 versus an industry median of 3.41.
According to the Peter Lynch chart, the stock appears to trade cheaply.
Federal Home Loan Mortgage Corp has a GuruFocus financial strength rating of 3 out of 10 and profitability and growth rating of 2 out of 10.
YRC Worldwide Inc. (YRCW) was trading around $7.28 on Friday for a market capitalization of $246.42 million. The Overland Park, Kansas-based transportation company has an earnings yield of 9.9%. The share price declined 26% over the past year through Feb.15. The price-sales ratio is 0.05 versus an industry median of 1.03. The share price at close Friday falls in the 52-week range of $2.41 to $11.76.
The stock seems to be priced fairly, according to below chart of Peter Lynch.
The stock has a recommendation rating of 2.7 out of 5 and an average target price of $8.40 per share.
GuruFocus has assigned a financial strength rating of 5 out of 10 and a profitability and growth rating of 5 out of 10.
Social Reality Inc. (SRAX) was trading around $3.93 on Friday with a market capitalization of approximately $39.82 million. The Los Angeles-based digital marketing and data management platform company has an earnings yield of 28.7%. For the 52 weeks through Feb. 15, the share price declined 7%. The share price at close Friday was 153.5% above the 52-week low of $1.55 and 52.7% from the 52-week high of $6. The price-book ratio is 1.48 versus an industry median of 2.33 and the price-sales ratio is 2.44 compared to an industry median of 1.17.