Viewing a stock as an "equity bond"

When you turn the P/E ratio on it's head you get the earnings yield. The earnings yield is a useful number to compare to other investment returns such as a bond (If you don't like the P/E ratio you can use CFO instead). A P/E of say, 20, would imply an earnings yield of 5% (1/20). On the other hand, a P/E of 12 would imply a earnings yield of  8.33%. When you compare the two, the latter is preferred because it's a higher yield relative to the price paid. Therefore, by implication, a lower P.E is preferred, ceteris paribus.

When you obtain the earnings yields for your stocks you should compare it to "risk-free" returns such as one would earn on a typical 10 year Gov bond. If the yield is less than the risk-free rate, You'd want to start asking a few questions such as growth rates in the yield.

Peter Lynch, a famous Mutual Fund investor who popularized the PEG ratio, said that if the earnings yield + dividend yield when summed was lower than the stocks P/E ratio, then the stock could a suitable candidate for further research as a possible investment. 

 The main difference between the earnings yield (when viewed in this manner) and the bond is that the bond's rate is fixed whereas the stocks yield isn't. Ideally, you want to analyse the potential growth in the yield, and the risk of it (chances of it materialising).

Happy hunting during the reporting season :)