The U.S.-Israel war with Iran, now nearly six months old, remains unresolved. A 60-day U.S.-Iran memorandum meant to produce a broader peace deal expired Monday with no agreement reached. Talks stalled, and both sides escalated instead.
Trump demanded Iran "raise white flag" and threatened to bomb Oman if it interfered with reopening the Strait of Hormuz, while Iran continued attacks that have kept traffic through the strait at a virtual standstill. Neither side shows signs of backing down.
Prolonged conflict has disrupted oil flow through Hormuz and resulted in a spike in oil prices. Add today's Fed minutes, and markets face compounding uncertainty from both geopolitics and monetary policy.
In this environment, value investing, which favors fundamentally sound, undervalued assets over speculative bets, offers a more prudent approach than chasing momentum.Value investors can consider stocks such as Darling Ingredients Inc. DAR, Avnet, Inc. AVT, Delek Logistics Partners, LP DKL and Star Bulk Carriers SBLK, which have high earnings yield.
Unlock Portfolio Value With Earnings Yield Metric
One metric widely used by value investors to identify potentially undervalued stocks is earnings yield. Calculated by dividing a company’s annual earnings per share by its current stock price, earnings yield indicates the amount of earnings generated for every dollar invested in a stock. Generally, a higher earnings yield suggests a stock may be undervalued relative to its earnings potential, while a lower earnings yield can indicate a richer valuation.
Earnings yield also provides a useful way to compare stocks with fixed-income investments such as bonds. When a stock’s earnings yield exceeds prevailing bond yields, it may offer a more attractive return potential, making it a valuable tool for investors searching for opportunities in an uncertain market.
Setting the Right Filters
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 have discussed four of the 27 stocks that qualified the screening:
Darling Ingredients is a global developer and producer of sustainable natural ingredients derived from edible and inedible bio-nutrients.The Zacks Consensus Estimate for DAR’s 2026 sales and EPS implies year-over-year growth of 13% and 926%, respectively. EPS estimates for the current and next year have moved up by $2.48 and $1.13, respectively, over the past 30 days. Darling Ingredients currently sports a Zacks Rank #1 and has a Value Score of B.Â
Avnet is one of the world’s largest distributors of electronic components and computer products. The Zacks Consensus Estimate for AVT’s fiscal 2027 sales and EPS implies year-over-year growth of 15% and 70%, respectively. EPS estimates for the current and next fiscal have moved up by $2.36 and $3.16, respectively, over the past 30 days. Avnet currently sports a Zacks Rank #1 and has a Value Score of B.Â
Delek Logistics offers pipeline, transportation and other services for crude oil, refined products and natural gas in the United States. The Zacks Consensus Estimate for DKL’s 2026 sales and EPS implies year-over-year growth of 38% and 19%, respectively. EPS estimates for the current and next year have moved up by 8 cents and $1.59, respectively, over the past 30 days. Delek Logistics currently sports a Zacks Rank #1 and has a Value Score of B.Â
Star Bulk is a global shipping company providing worldwide seaborne transportation solutions in the dry bulk sector. The Zacks Consensus Estimate for SBLK’s 2026 sales and EPS implies year-over-year growth of 36% and 361%, respectively. EPS estimates for the current and next year have moved up by 57 cents and 39 cents, respectively, over the past 30 days. Star Bulk currently sports a Zacks Rank #1 and has a Value Score of B.Â
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