11 Highest Yielding Stocks by Sector for 2024 | Summary and Q&A

TL;DR

This content highlights 11 stocks with the highest earnings yield in various sectors, providing insights for investors looking to diversify their portfolios and maximize returns.

Key Insights

• ✋ Verizon Communications dominates the communication services sector with its high dividend yield and solid earnings power.
• ✳️ Qualcomm's diversification into automotive and Internet of Things semiconductors offsets revenue risk from its dependence on Apple.
• 😒 Real estate investment trusts (REITs) require the use of funds from operations (FFO) instead of net income for accurate earnings yield calculations.
• 💪 Citigroup offers value opportunities with a reasonable valuation, strong earnings yield, and attractive dividend yield.
• ✋ Emerson Electric's transition towards automation and strong financial performance contribute to its high earnings yield.
• 💪 Nucor Corporation's strong dividend history and position in the material sector make it an appealing investment choice.
• ❓ Bunge Limited benefits from its agribusiness leadership, contributing to a solid earnings yield in the consumer staples sector.
• ❓ DR Horton's dominance in the homebuilding market and the significant housing shortage make it a favorable investment in the consumer discretionary sector.
• ✋ Pfizer's strong performance outside of the COVID-19 vaccine market and solid pipeline contribute to its high earnings yield in the healthcare sector.
• 🚙 Consolidated Edison provides stability and diversification in the utility sector with its consistent earnings yield and commitment to clean energy goals.
• 🥺 Valero Energy's position as a leading refiner and its shareholder-friendly practices make it an attractive investment option in the energy sector.

Transcript

I found 11 stocks with the highest earnings yield in the market all the way up to 38 yield and an average of 14 hey bowtie Nation Joseph Hogue here following up on our highest earnings yield stocks video and highlighting the best yielding stocks in each sector in our video last week we saw mostly older mature companies in energy materials and finan... Read More

Questions & Answers

Q: Why is the earnings yield a better measure of return than the dividend yield?

The earnings yield accounts for the total profit return an investor earns as a stock owner, considering the earnings per share and the value of the company. It provides a more comprehensive measure of return compared to the dividend yield, which only considers the cash dividend paid out by the company.

Q: How is the earnings yield calculated, and why is Enterprise Value important in the calculation?

The earnings yield is calculated by dividing the earnings per share by the Enterprise Value per share. The Enterprise Value accounts for the market value of shares, cash, and debt of a company, providing a more accurate measure of earnings yield, especially for highly indebted companies.

Q: What are the key factors that contribute to the high earnings yield of Ashford Hospitality Trust (AHT)?

The high earnings yield of AHT is mainly attributed to the use of funds from operations (FFO) instead of net income to evaluate real estate stocks. AHT's strong portfolio of high-end hotels, geographic diversification, and focus on the luxury market contribute to its high earnings yield potential.

Q: What makes Valero Energy (VLO) a favorable investment in the energy sector?

Valero Energy has the highest earnings yield in the energy sector due to its position as the world's largest refiner and strong dividend track record. The company's commitment to returning cash to shareholders through dividends and share repurchases, along with its focus on refinery operations, contribute to its attractive earnings yield.

Summary & Key Takeaways

• Verizon Communications (VZ) has the highest earnings yield in the Communication Services sector, with a solid dividend yield of 7.3%.

• Qualcomm (QCOM) offers a relatively high earnings yield of 7.5% in the technology sector, despite its revenue dependence on Apple.

• Ashford Hospitality Trust (AHT) stands out in the real estate sector with a strong earnings yield of nearly 25%, considering the use of funds from operations instead of net income for evaluation.

• Citigroup (C) presents a value play opportunity in the financial sector, with a solid 16% earnings yield and a 4.6% dividend yield.

• Emerson Electric (EMR) leads in the industrial sector with a 9.3% earnings yield, supported by strong sales growth and free cash flow surge.

• Nucor Corporation (NUE) offers the highest yield in the material sector, with an impressive 18% earnings yield and a long history of dividend increases.

• Bunge Limited (BG) shows a solid 10.1% earnings yield in the consumer staples sector, driven by its diverse agribusiness operations.

• DR Horton (DHI), the largest homebuilder in the US, presents a 13% earnings yield in the consumer discretionary sector, supported by the significant housing shortage.

• Pfizer (PFE) stands out in the healthcare sector with a 12% earnings yield, driven by strong sales growth outside of the COVID-19 vaccine.

• Consolidated Edison (ED) offers a 4.7% earnings yield in the utility sector, providing stability and diversification to investors.

• Valero Energy (VLO) presents the highest earnings yield in the energy sector, reaching 29% and supported by consistent cash returns to shareholders.