4 High Earnings Yield Value Stocks to Own Amid Market Uncertainty

U.S. equities ended 2025 on a strong note, with the S&P 500 rising about 16%, but the outlook is turning complex. Geopolitical risks are back in focus after President Donald Trump announced temporary U.S. control over Venezuela, raising concerns about instability in a key oil-producing nation.

At the same time, investors are bracing for policy uncertainty, including a Supreme Court ruling on Trump’s tariffs and the appointment of a new Federal Reserve chair. With earnings season approaching and key employment data due later this week, volatility could increase. While the Fed cut rates three times in 2025 to support a weakening labor market, inflation remains above target, leaving the path for 2026 policy uncertain.

In an environment shaped by policy uncertainty, geopolitical risk and unclear rate direction, value investing offers stability. Investors should focus on companies with strong fundamentals, reasonable valuations and durable cash flows, which can help investors manage volatility better.

One of the most common valuation metrics to pick undervalued stocks with solid upside potential is the P/E ratio. However, there’s another interesting ratio that you can consider for ferreting out attractively valued stocks. And that is earnings yield. One could invest in high earnings yield stocks like Allied Gold Corporation AAUC, Alcoa Corp. AA, Star Bulk Carriers SBLK and PHINIA Inc. PHIN to fetch handsome long-term rewards.

Earnings Yield More Illuminating Than P/E

Earnings yield is useful for investors concerned about the rate of return on investment. This metric, expressed in percentage, is calculated as annual earnings per share (EPS) divided by market price. This metric measures the anticipated yield (or return) from earnings for each dollar invested in a stock today. While comparing stocks, if other factors are similar, the ones with higher earnings yield are considered undervalued, while those with lower earnings yield are seen as overpriced.

While earnings yield is nothing but the reciprocal of the P/E ratio, it is a little more illuminating than the traditional P/E ratio, as it also facilitates the comparison of stocks with fixed-income securities. Investors often compare the earnings yield of a stock to the prevailing interest rates, such as the current 10-year Treasury yield, to get a sense of the return on investment it offers compared to virtually risk-free returns.

If the yield on a stock is lower than the 10-year Treasury yield, it would be considered overvalued relative to bonds. Conversely, if the yield on the stock is higher, it would be considered undervalued. In this situation, investing in the stock market would be a better option for a value investor.

The Winning Strategy

We have set an Earnings Yield greater than 10% as our primary screening criterion but it alone cannot be used for picking stocks that have the potential to generate solid returns. So, we have added the following parameters to the screen:

Estimated EPS growth for the next 12 months greater than or equal to the S&P 500: This metric compares the 12-month forward EPS estimate with the 12-month actual EPS.

Average Daily Volume (20 Day) greater than or equal to 100,000: High trading volume implies that a stock has adequate liquidity.

Current Price greater than or equal to $5.

Buy-Rated Stocks: Stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) have been known to outperform peers in any type of market environment. You can see the complete list of today’s Zacks #1 Rank stocks here.

Our Picks

Here we highlight four of the 46 stocks that qualified the screening:

Allied Gold is a Canada-based gold producer, with operations spread across Côte d’Ivoire, Mali and Ethiopia. The Zacks Consensus Estimate for AAUC’s 2026 sales and earnings implies year-over-year growth of 45% and 323%, respectively. EPS estimates for 2026 have moved up by 85 cents over the past 30 days. Allied Gold currently sports a Zacks Rank #1 and has a Value Score of B.

Alcoa, headquartered in Pittsburgh, produces and sells bauxite, alumina, and aluminum products. The Zacks Consensus Estimate for AA’s 2026 sales and earnings implies year-over-year growth of 7% and 29%, respectively. EPS estimates for 2026 have moved up by $1.03 over the past 30 days. Alcoa currently sports a Zacks Rank #1 and has a Value Score of B.

Star Bulk is a global shipping company—based in Athens— providing worldwide seaborne transportation solutions in the dry bulk sector. The Zacks Consensus Estimate for SBLK’s 2026 sales and earnings implies year-over-year growth of 19% and 224%, respectively. EPS estimates for 2026 have moved up by 61 cents over the past 60 days. Star Bulk currently sports a Zacks Rank #1 and has a Value Score of A.

PHINIA, headquartered in Michigan, is a leader in premium fuel systems, electrical systems, and aftermarket solutions for the automotive industry. The Zacks Consensus Estimate for PHIN’s 2026 sales and earnings implies year-over-year growth of 2% and 15%, respectively. EPS estimates for 2026 have moved up by 52 cents over the past seven days. PHINIA currently sports a Zacks Rank #1 and has a Value Score of A.

You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.

The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

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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.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.

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This article originally published on Zacks Investment Research (zacks.com).

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