Markets are likely to remain volatile as geopolitical tensions in the Middle East show little sign of resolution. U.S. President Trump’s comments describing the ceasefire as being on “massive life support” have added to investor concerns. With hopes for a U.S.–Iran peace deal fading, uncertainty has increased, pushing oil prices higher. Brent and WTI are trading above $100 per barrel, partly due to disruptions around the Strait of Hormuz.
Rising energy costs are feeding into broader inflation. The latest CPI data showed a 0.6% increase in April, lifting annual inflation to 3.8%, slightly above expectations and the largest rise since May 2023. Sticky inflation and higher fuel prices are likely to keep markets choppy.
In such conditions, value investing becomes important, as it emphasizes strong fundamentals and long-term discipline over short-term volatility. This approach involves buying stocks that are priced below what they are really worth. It works on the idea that markets often misprice stocks, giving investors a chance to buy low and profit later.
LyondellBasell Industries N.V. LYB, Nexa Resources NEXA, Vista Energy VIST and Seanergy Maritime Holdings Corp SHIP are a few solid high-value picks with high earnings yields.
Understanding Earnings Yield Metric
Earnings yield shows how much profit a company makes for each dollar of its stock price. The metric, expressed in percentage, is calculated as (Annual Earnings per Share/Market Price) x 100. It is actually the reverse of the price-to-earnings (P/E) ratio. A high earnings yield may mean the stock is undervalued. A low yield could mean the stock is too expensive.
Investors can also use earnings yield to compare stocks with bond returns like the 10-year Treasury yield. If the stock market's earnings yield is higher than the bond yield, stocks might be more attractive. With regard to this, earnings yield can be more illuminating than the traditional P/E ratio, as the former facilitates the comparison of stocks with fixed-income securities.
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 40 stocks that qualified the screening:
LyondellBasell is a global leader in plastics, chemicals, and refining. Its products serve key industries such as electronics, automotive, packaging, construction, and biofuels. The Zacks Consensus Estimate for LYB’s 2026 sales and earnings implies year-over-year growth of 12% and 414%, respectively. EPS estimates for the current and next year have moved up by 38 cents and 40 cents, respectively, over the past seven days. LyondellBasell currently sports a Zacks Rank #1 and has a Value Score of B.
Nexa Resources is an integrated zinc producer, engaged in developing and operating mining and smelting assets, primarily in Latin America. The Zacks Consensus Estimate for NEXA’s 2026 sales and earnings implies year-over-year growth of 8% and 145%, respectively. EPS estimates for the current and next year have moved up by 22 cents and 18 cents, respectively, over the past 30 days. Nexa Resources currently sports a Zacks Rank #1 and has a Value Score of A.
Vista Energy is a leading exploration and production company with a strong footprint in Vaca Muerta, which is among the largest shale oil and gas resources outside of North America. The Zacks Consensus Estimate for VIST’s 2026 sales and earnings implies year-over-year growth of 63% and 310%, respectively. EPS estimates for the current and next year have moved up by $1.58 and $1.63, respectively, over the past 30 days. Vista Energy currently sports a Zacks Rank #1 and has a Value Score of A.
Seanergy Maritime is a global shipping firm focused on transporting dry bulk commodities by sea. The Zacks Consensus Estimate for SHIP’s 2026 sales and earnings implies year-over-year growth of 16% and 63%, respectively. EPS estimates for the current and next year have moved up by 13 cents and 10 cents, respectively, over the past 30 days. Seanergy Maritime currently sports a Zacks Rank #1 and has a Value Score of B.
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LyondellBasell Industries N.V. (LYB): Free Stock Analysis Report
Seanergy Maritime Holdings Corp (SHIP): Free Stock Analysis Report
Nexa Resources S.A. (NEXA): Free Stock Analysis Report
Vista Energy, S.A.B. de C.V. - Sponsored ADR (VIST): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).