Zacks.com featured highlights include Blooming' Brands, Urban Outfitters, Baidu and Graphic Packaging Holding
For Immediate Release
Chicago, IL – April 13, 2023 – Stocks in this week’s article are Blooming' Brands, Inc. BLMN, Urban Outfitters, Inc. URBN, Baidu BIDU and Graphic Packaging Holding Co. GPK.
4 High Earnings Yield Stocks to Enhance Your Portfolio Value
Investors often use the P/E ratio and other valuation metrics to pick undervalued stocks with solid upside potential. One can also use another interesting ratio. Earnings yield, expressed in percentage, is calculated as (Annual Earnings per Share/Market Price) x 100.
While comparing stocks, if other factors are similar, investors can look out for stocks with higher earnings yield. This is because stocks with higher earnings yield have the potential to provide comparatively greater returns. Blooming' Brands, Inc., Urban Outfitters, Inc., Baidu and Graphic Packaging Holding Co. are some stocks boasting high earnings yield.
Just like the case with dividend yield, firms with higher earnings yield are considered underpriced, while those with lower earnings yield are seen as overpriced. Earnings yield captures both the tangible and intangible yield of a firm, as opposed to dividend yield, which only takes into account the tangible yield.
Importantly, earnings yield can also be used to compare the performance of a market index with the 10-year Treasury yield. For instance, when the yield of the market index is more than the 10-year Treasury yield, stocks can be considered as undervalued than bonds. In this situation, investing in the stock market would be a better option for a value investor.
Earnings Yield: Simply the Inverse of P/E
Earnings yield is nothing but the reciprocal of one of the most popular valuation metrics, i.e., the P/E ratio (stock price/earnings per share). In fact, as the concept of earnings yield is already indirectly captured in the P/E ratio, earnings yield as an investment valuation metric is not as widely used as the P/E ratio.
Having said that, it should be noted that earnings yield is an important tool for investors with exposure to both stocks and bonds. In fact, with regard to this, earnings yield can be more illuminating than the traditional P/E ratio, as the former facilitates the comparison of stocks with fixed-income securities.
Our Picks
Here we discuss four of the 57 stocks that qualified the screen:
Bloomin' Brands is a casual dining restaurant company with a portfolio of differentiated restaurants. It has five concepts, Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill, Fleming's Prime Steakhouse and Wine Bar and Roy's. Bloomin' Brands offers its products and services through company-owned and franchised locations throughout the United States and internationally.
The Zacks Consensus Estimate for BLMN's 2023 and 2024 earnings suggests year-over-year growth of 16.3% and 5.5%. The consensus mark for Bloomin' Brands 2023 and 2024 EPS has been revised upward by 3 cents and 7 cents, respectively, in the past 30 days. The company surpassed estimates in each of the four trailing quarters, the average surprise being 7.5%. The stock currently sports a Zacks Rank #1 and has a Value Score of A.
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gift products. The company has been strengthening its direct-to-consumer business, enhancing productivity across the existing channels and optimizing inventory levels. URBN's strategic growth initiative, FP Movement and store-growth endeavors are also impressive.
The Zacks Consensus Estimate for URBN's current and next fiscal year earnings suggests year-over-year growth of 41.7% and 12%. The consensus mark for Urban Outfitters fiscal 2024 and 2025 EPS has been revised upward by 19 cents and 3 cents, respectively, in the past 60 days. The company has a long-term expected EPS growth rate of 18%, higher than the industry's 16.3%. The stock currently sports a Zacks Rank #1 and has a Value Score of A.
Baidu is a China-based search engine and diversified technology company. Similar to its American counterpart Alphabet, Baidu provides a number of online services, including video, maps, scholar, smart assistant and many others.The company offers Baidu App to access search, feed, and other services using mobile devices; Baidu Search to access its search and other services; Baidu Feed that provides users with a personalized timeline based on their demographics and interests, and Haokan, a short video app.
The Zacks Consensus Estimate for BIDU's 2023 and 2024 earnings suggests year-over-year growth of 35% and 24.6%. The consensus mark for Baidu's 2023 and 2024 EPS has been revised upward by 1 cent and 20 cents, respectively, in the past 30 days. The company surpassed estimates in each of the four trailing quarters, the average surprise being 45.5%. The stock currently sports a Zacks Rank #1 and has a Value Score of B.
Graphic Packaging is a sustainable paper and fiber-based packaging firm with a portfolio that services companies in beverages, foodservice, personal care, household products, pets, and beyond. Graphic Packaging made a big strategic acquisition in 2021 and bought AR Packaging, thereby expanding its reach to Europe. Innovation and more circular consumer-packaging solutions are consistently driving GPK's organic sales growth.
The Zacks Consensus Estimate for GPK's 2023 and 2024 earnings suggests year-over-year growth of 18% and 4.1%. The consensus mark for Graphic Packaging's 2023 and 2024 EPS has been revised upward by a cent and 2 cents, respectively, in the past seven days. The company surpassed estimates in each of the four trailing quarters, the average surprise being 14.3%. The stock currently carries a Zacks Rank #2 and has a Value Score of A.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2077377/4-high-earnings-yield-stocks-to-enhance-your-portfolio-value
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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Baidu, Inc. (BIDU) : Free Stock Analysis Report
Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report
Graphic Packaging Holding Company (GPK) : Free Stock Analysis Report
Bloomin' Brands, Inc. (BLMN) : Free Stock Analysis Report
