2014

Zacks.com featured expert Kevin Matras highlights: The Blackstone Group LP, Marathon Petroleum Corp., RLJ Lodging Trust, United Rentals, Inc. and Valeant Pharmaceuticals Intl, Inc.

CHICAGO, Dec. 12, 2012 /PRNewswire/ -- Stocks in this week's article include: The Blackstone Group LP (NYSE: BX), Marathon Petroleum Corp. (NYSE: MPC), RLJ Lodging Trust (NYSE: RLJ), United Rentals, Inc. (NYSE: URI) and Valeant Pharmaceuticals Intl, Inc. (NYSE: VRX). Kevin Matras talks about a stock's Earnings Yield and how to use it.

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Screen of the Week written by Kevin Matras of Zacks Investment Research: A stock's Earnings Yield measures just that, the anticipated yield (or return) an investment in a stock could give you based on the earnings and the price paid for the stock.

The most common way people will use this ratio is to compare it to other stocks and to compare the yields to the 10 Year T-Bill.

Conventional wisdom has it that if the yield on the stock market (S&P 500 for example) is lower than the yield on the 10 Year Treasury, then stocks might be considered overvalued. If the yield on the S&P 500 is greater than the 10 Year T-Bill, stocks would be considered undervalued.

The theory behind this is that Bonds and Stocks are competing for investors' dollars. And to attract investment interest in stocks, a higher yield needs to be paid to the stock investor for the extra risk he's assuming compared to the virtual risk-free investment offered in US backed Treasuries.

If earnings go up, the yield goes up. If earnings go down, so does the yield.

Prices also affect the yield, but they move inversely. If Prices go up, the yield goes down. And if prices go down, the yield goes up.

Currently, the Earnings Yield for the S&P is 7.63%, compared to the 10 Year Treasury of 1.63%. So stocks are still the more attractive investment, assuming you're ok with the risk that comes along with it.

The screen I'm running today looks for the following:

For the rest of this Screen of the Week article please visit Zacks.com at: http://www.zacks.com/commentary/24925/

Sign up now for your free trial today and start picking better stocks immediately. And with the backtesting feature, you can test your ideas to see how you can improve your trading in both up markets and down markets. Don't wait for the market to get better before you decide to do better. Start learning how to be a better trader today: http://at.zacks.com/?id=111

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.

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine.  But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here http://at.zacks.com/?id=112

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros.  In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros http://at.zacks.com/?id=113

Follow us on Twitter:  http://twitter.com/zacksresearch

Join us on Facebook:  http://www.facebook.com/ZacksInvestmentResearch

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: www.Zacks.com

SOURCE Zacks Investment Research, Inc.



RELATED LINKS
http://www.zacks.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.