Investors could be interested in the three non-cyclical stocks listed below, as their earnings yields (as calculated via Joel Greenblatt (Trades, Portfolio)'s method) are outperforming the 20-year high quality market corporate bond spot rate of 3% as of the writing of this article.
Greenblatt calculates the earnings yield as the company's earnings before interest and tax (Ebit) divided by its enterprise value. This ratio represents a more reliable reference for the evaluation of non-cyclical stocks, whose earnings have little or no correlation with the business cycle (as the metric only looks at 12 months of business activities).
Centrais Eletricas Brasileiras SA
The first stock investors could be interested in is Centrais Eletricas Brasileiras SA (EBR, Financial), a generator and distributor of electricity in Brazil.
The stock grants an earnings yield of 10.91% as of the June 2021 quarter. This stands above the median point of the past 10-year historical earnings yield range of -169.64% to 46.36%. Centrais Eletricas Brasileiras SA's earnings yield ranks higher than 79% of 531 companies that are operating in the utilities-regulated industry.
The share price was trading at around $6.78 at close on Monday for a market capitalization of $10.64 billion and a 52-week range of $4.69 to $9.61.
Its price-earnings ratio is 6.61 and its price-book ratio is 0.77.
Currently, Centrais Eletricas Brasileiras SA pays quarterly dividends with a trailing 12-month dividend yield of 6.6% and a forward dividend yield of 10.8% as of Oct. 4.
Newell Brands Inc
The second stock investors could be interested in is Newell Brands Inc (NWL, Financial), an Atlanta, Georgia-based manufacturer and global distributor of consumer and commercial products.
The company grants an earnings yield of 5.98% as of the June 2021 quarter. This stands significantly above the median point of the 10-year historical range of -63.2% to 9.49% and ranks higher than 62% of the 1,753 companies that are operating in the consumer-packaged goods industry.
The share price was trading at around $22.12 at close on Monday for a market capitalization of $9.41 billion and a 52-week range of $16.57 to $30.10.
Its price-earnings ratio is 13.17 and its price-book ratio is 2.36.
Currently, Newell Brands Inc pays quarterly dividends with trailing 12-month and forward dividend yields of 4.16% as of Oct. 4.
Weyerhaeuser Co
The third stock investors could be interested in is Weyerhaeuser Co (WY, Financial), a Seattle-based real estate investment trust that manages approximately 11 million acres of timberlands in the U.S., plus others under log-term license agreements in Canada.
The company grants an earnings yield of 11.39% as of the June 2021 quarter, standing well above the median point of the 10-year historical range of 0.25% to 11.67% and ranking higher than 92% of 673 companies that are operating in the REITs industry.
The share price was trading at $35.72 at close on Monday for a market capitalization of $26.78 billion and a 52-week range of $26.57 to $41.68.
Its price-earnings ratio is 11.71 and the price-book ratio is 2.58.
Currently, Weyerhaeuser Co pays quarterly dividends with trailing 12-month and forward dividend yields of 1.9% as of Oct. 4.
Disclosure: I have no positions in any securities mentioned.
