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3 High Earnings Yield Stocks

Picking up stocks that more than double the earnings yield that 20-year high-quality corporate bonds offer to their holders enhances the likelihood to uncover value opportunities. Holders of these bonds, which represent corporate loans issued by triple-A, double-A and single-A-rated companies, receive a 3.45% monthly spot rate.

The following stocks offer earnings yields of more than 6.9% and trade their earnings for less than 14.5 times their price.


Continental Resources

Shares of Continental Resources Inc. (NYSE:CLR) closed at $28.21 on Thursday for a market capitalization of $10.48 billion.

Continental Resources is an Oklahoma-based crude oil and natural gas exploration and production company with properties mainly located in the north, south and east regions of the United States. Its stock has an earnings yield of 7.41% and a price-earnings ratio of 13.5.

The stock has fallen 39.5% over the past five years through Jan. 30 and now trades near the Peter Lynch earnings line.

GuruFocus assigned a moderate rating of 4 out of 10 for the company's financial strength and a very positive rating of 7 out of 10 for its profitability.

The stock has a dividend yield of 0.17% as of Thursday.

Wall Street issued an overweight recommendation rating for shares of Continental Resources with an average target price of $41.60.

Synnex

Shares of Synnex Corp. (NYSE:SNX) closed at $140.09 on Thursday for a market capitalization of $7.21 billion.

Synnex Corp. is a Fremont, California-based provider of business process services in the Americas, Europe, Africa and Asia-Pacific. Its stock has an earnings yield of 7% and a price-earnings ratio of 14.3.

The stock price has increased by nearly 86% over the past five years through Jan. 30, but the share price is still below the Peter Lynch earnings line, suggesting that the stock is not expensive.

Synnex Corp. has received a moderate GuruFocus rating of 5 out of 10 for its financial strength and a very high rating of 8 out of 10 for its profitability.

The stock has a dividend yield of 1.08% as of Thursday.

Wall Street recommends buying shares of Synnex Corp. and has set an average target price of $167.

Allison Transmission

Shares of Allison Transmission Holdings Inc. (NYSE:ALSN) closed at $45.60 on Thursday with a market capitalization of $5.44 billion.

Allison Transmission is an Indianapolis-based designer, manufacturer and seller of fully automatic ad hoc transmissions for medium and heavy tactical U.S. defense vehicles and commercial vehicles worldwide. Its stock has an earnings yield of 11.33% and a price-earnings ratio of 8.85.

The share price has increased 43.3% over the past five years through Jan. 30 and it is now trading below its fair value, according to the Peter Lynch chart.

GuruFocus assigned the company a rating of 4 out of 10 for its financial strength and a rating of 8 out of 10 for its profitability.

The stock grants a 1.32% forward dividend yield as of Thursday.

As of January, seventeen Wall Street sell-side analysts have issued recommendation ratings on shares of Allison Transmission Holdings: five strong buys, two buys, eight holds and two underperforming.

Disclosure: I have no positions in any securities mentioned.

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This article first appeared on GuruFocus.