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 The last 12 months might have been a rollercoaster ride for investors but they have ultimately turned out to be rewarding. Despite inflationary pressures and recession fears, the S&P 500 index has surged 25% year to date. The market sentiment turned bullish, largely influenced by the Federal Reserve’s dovish stance. The Fed maintained steady interest rates and projected three rate cuts totaling 75 basis points for 2024, fostering optimism for reduced borrowing costs and potential economic stimulation. But let’s not get too bullish here.In 2024, the investment climate is expected to be less volatile than in 2023 but caution is advised. While recession fears diminish, lingering concerns from inflation, prior interest rate hikes and geopolitical tensions persist. Experts foresee heightened pressure on company margins and weakened revenue growth in 2024, signaling a potentially challenging investment landscape. Investors should exercise prudence amid evolving economic dynamics.
 Focus on Value InvestingIn the realm of investment strategies, one time-tested approach is value investing, which centers around identifying stocks trading below their intrinsic value. This methodology is grounded in the notion that the market frequently misjudges stock prices in the short term, creating opportunities for long-term investors.Value investing takes a long-term view and seeks to gauge the intrinsic value of companies based on their fundamental strength, earnings potential, and financials. It seeks to profit from investing in stocks that appear to be trading at a discount to their intrinsic values and eventually make handsome returns when the stock price rises toward that value, reflecting the actual fundamentals.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 Photronics, Inc. (PLAB – Free Report), Pilgrim’s Pride Corporation (PPC – Free Report), Resideo Technologies (REZI – Free Report), and JinkoSolar Holding Co., Ltd. (JKS – Free Report) to fetch handsome long-term rewards.
 Earnings Yield More Illuminating Than P/EEarnings 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 StrategyWe 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. 
 Our PicksHere we highlight four of the 22 stocks that qualified for the screening:Photronics is a leading worldwide manufacturer of photomasks. Photomasks are high-precision quartz plates that contain microscopic images of electronic circuits. The Zacks Consensus Estimate for PLAB’s current fiscal earnings per share has been revised upward by 35 cents in the past 30 days and implies year-over-year growth of 27.4%. Photronics currently sports a Zacks Rank #1 and has a Value Score of B. Pilgrim’s Pride engages in the production, processing, marketing, and distribution of fresh, frozen, and value-added chicken and pork products to retailers, distributors, and food service operators. The Zacks Consensus Estimate for PPC’s 2024 earnings implies year-over-year growth of 62.4%. Estimates for 2024 earnings per share have moved up by 36 cents over the past 60 days. Pilgrim’s Pride currently sports a Zacks Rank #1 and has a Value Score of A. Resideo provides critical comfort and security solutions primarily in residential environments and is a distributor of low-voltage and security products. The Zacks Consensus Estimate for REZI’s 2024 earnings implies year-over-year growth of 23.6%. Estimates for 2024 earnings per share have moved up by 33 cents over the past 60 days. Resideo currently sports a Zacks Rank #1 and has a Value Score of A. JinkoSolar is one of the leading solar module manufacturers, which distributes its solar products to a diversified international utility, commercial, and residential customer base globally. The Zacks Consensus Estimate for JKS’ 2024 earnings implies year-over-year growth of 8.5%. Estimates for 2024 earnings per share have moved up by 24 cents over the past 30 days. JinkoSolar currently sports a Zacks Rank #1 and has a Value Score of A. More By This Author:3 Reasons Why Amphastar Is a Great Growth StockThese Two Finance Stocks Could Beat Earnings: Why They Should Be On Your Radar 3 Top-Ranked Dividend Stocks: A More Intelligent Way To Boost Your Retirement Income