5 High Earnings Yield Value Picks to Add to Your Portfolio Now

Market Overview - The S&P 500 has gained approximately 24% in both 2023 and 2024, with attention shifting to the policies of President-elect Donald Trump post-inauguration on January 20, 2025 [1] - Inflation remains persistent, and the Federal Reserve anticipates only two interest rate cuts in 2025, leading to a year of economic uncertainty and policy changes [1] - Value investing is suggested as a potentially smart strategy during these uncertain times [1] Value Investing - Value investing aims to profit from stocks trading at a discount to their intrinsic values, with the expectation of significant returns as stock prices align with fundamentals [2] - Stocks such as AdvanSix Inc. (ASIX), Coterra Energy Inc. (CTRA), Kingstone Companies (KINS), Nexa Resources (NEXA), and United Airlines Holdings, Inc. (UAL) are highlighted as value stocks with high earnings yield [2] Earnings Yield - Earnings yield is a key metric for investors, calculated by dividing annual earnings per share (EPS) by the market price of the stock, indicating expected returns for each dollar invested [3] - Higher earnings yields suggest undervaluation, while lower yields indicate overvaluation when compared to similar stocks [3][4] Screening Criteria for Stock Selection - A primary screening criterion is set at an earnings yield greater than 10%, supplemented by additional parameters such as estimated EPS growth for the next 12 months being greater than or equal to the S&P 500 [5] - Average daily trading volume of at least 100,000 is also considered to ensure adequate liquidity [6] - Stocks must have a current price of at least $5 [7] Selected Stocks - AdvanSix Inc. (ASIX): Manufacturer of nylon 6 resin and chemical intermediates, with a Zacks Consensus Estimate for 2025 sales and earnings growth of 8% and 174%, respectively [8][9] - Coterra Energy Inc. (CTRA): Leading upstream energy company with a focus on shale regions, expecting 2025 sales and earnings growth of 36% and 80%, respectively [10][11] - Kingstone Companies (KINS): Provides property and casualty insurance, with a focus on core business and expected 2025 sales and earnings growth of 23% and 11%, respectively [12][13] - Nexa Resources (NEXA): Integrated zinc producer with a focus on optimizing its portfolio, expecting 2025 sales and earnings growth of 5.6% and 1,028%, respectively [14][15] - United Airlines Holdings, Inc. (UAL): Air transportation services provider with a focus on premium demand, expecting 2025 sales and earnings growth of 8% and 15.2%, respectively [16][17]