5 High Earnings Yield Value Picks to Counter Market Uncertainty

Market Overview - The S&P 500 index declined over 5% in Q1 2025 due to concerns over tariffs, economic uncertainty, and the rise of low-cost AI offerings in China, leading to heightened market volatility [1] - Goldman Sachs has lowered its year-end S&P 500 target, citing increased recession risks and expectations of weakening corporate profits [1] Value Investing Strategy - Focusing on undervalued stocks with strong fundamentals can provide a buffer against market downturns and potential upside when market sentiment shifts [2] - Value stocks tend to perform well when growth stocks face challenges, making them appealing for risk-averse investors during turbulent times [2] Earnings Yield Metric - Earnings Yield is calculated as annual earnings per share (EPS) divided by market price, serving as a measure of anticipated return from earnings for each dollar invested [4] - A higher earnings yield indicates a stock is undervalued compared to those with lower yields, which are seen as overpriced [4] - The earnings yield can be compared to prevailing interest rates, such as the 10-year Treasury yield, to assess relative value against risk-free returns [5][6] Stock Screening Criteria - A primary screening criterion is an Earnings Yield greater than 10%, supplemented by estimated EPS growth for the next 12 months being greater than or equal to the S&P 500 [7] - Additional criteria include an average daily trading volume of at least 100,000 and a current price of $5 or more [8][9] Selected Value Stocks - ANI Pharmaceuticals (ANIP): Expected EPS growth of 22% and 14% for 2025 and 2026, respectively, with a Zacks Rank 1 and Value Score of B [10] - Insteel Industries (IIIN): Projected EPS growth of 39.4% and 116% for fiscal 2025 and 2026, respectively, also with a Zacks Rank 1 and Value Score of B [11] - Pitney Bowes (PBI): Anticipated EPS growth of 47.5% and 8.3% for 2025 and 2026, with a Zacks Rank 1 and Value Score of A [12] - IHS Holding (IHS): Expected EPS growth of 115% and 17% for 2025 and 2026, holding a Zacks Rank 1 and Value Score of A [13] - HighPeak Energy (HPK): Projected EPS growth of 157% and 20% for 2025 and 2026, with a Zacks Rank 1 and Value Score of A [14]