earnings yield


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Earnings yield

The ratio of earnings per share, after allowing for tax and interest payments on fixed interest debt, to the current share price. The inverse of the price-earnings ratio. It is the total twelve months earnings divided by number of outstanding shares, divided by the recent price, multiplied by 100. The end result is shown in percentage terms. We often look at earnings yield because this avoids the problem of zero earnings in the denominator of the price-earning ratio.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Earnings-Price Ratio

The annual earnings of a security per share at a given time divided into its price per share. It is the inverse of the more common price-earnings ratio. Often, the earnings one uses are trailing 12-month earnings, but some analysts use other forms. The earnings-price ratio is a way to help determine a security's stock valuation, that is, the fair value of a stock in a perfect market. It is also a measure of expected, but not realized, growth. It may be used in place of the price-earnings ratio if, say, there are no earnings (as one cannot divide by zero). It is also called the earnings yield or the earnings capitalization ratio.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

earnings yield

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

earnings yield

NET PROFIT after tax per ordinary share (EARNINGS PER SHARE) of a JOINT-STOCK COMPANY for a given ACCOUNTING PERIOD, expressed as a percentage of the current market price per share. For example, if profit after tax was £2 per share and the market price per share was £5 then the earnings yield would be 40%. Earnings yield is the mirror image of the PRICE-EARNINGS RATIO.

Earnings yield depends upon DIVIDEND YIELD and DIVIDEND COVER. For example, if dividend yield was 20% and the dividend was covered twice over then the earnings yield would be 20% x 2 or 40%.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

earnings yield

NET PROFIT after tax per ordinary share (EARNINGS PER SHARE) of a JOINT-STOCK COMPANY for a given accounting period, expressed as a percentage of the current market price per share. For example, if profit after tax was £1 per share and the market price per share was £10, then the earnings yield would be 10%. Earnings yield is the mirror image of the PRICE-EARNINGS RATIO.

Earnings yield depends upon DIVIDEND YIELD and DIVIDEND COVER. For example, if dividend yield was 5% and the dividend was covered twice over then the earnings yield would be 5% x 2, or 10%.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
A commonly used gauge of future stock returns is the earnings yield, or the inverse of the ubiquitous price-to-earnings ratio-and for good reason.
Meanwhile, the gap of the market's earnings yield, which is the reverse of the current PE ratio at 15.6 times over the 10-year Philippine bond yield, continued to widen to 1.37 percent from 0.8 percent three months ago.
This could preserve an earnings yield of 6.5% and would allow a dividend yield of around 6%.
stocks is to compare the earnings yield of the S&P 500, currently about 4.3%, against the 10-year Treasury yield.
They address the bond-stock earnings yield differential model based on the 1987 US stock market crash and apply it to markets like Japan and the US; discuss the short window 2007-2009 crash period in the US, China, and Iceland; and compare the bond-stock earnings yield differential model with Campbell and ShillerAEs high price-earnings models.
New York State Consumer Price Index--NY, 0.10% 0.20% NJ, CT Unemployment Rate 4.90% 5.10% NYS Index of Coincident N/A -1.90% indicators Forte Capital's Proprietary Market Risk Barometer Bullish Neutral Bearish 10 9 8 7 6 5 4 3 2 1 Market Valuation 3 Monetary Environment 2 Investor Psychology 5 Internal Market Technicals 4 Overall Short-Term Outlook 4.14 Overall Long-Term Outlook 3.89 As of 12/31/16 Equity Market Statistics 12/31/16 11/30/16 Dow Jones Industrials Dividend Yield 2.51% 2.54% Price-to-Earnings Ratio (12 Mth Trailing) 20.48 20.01 Price-to-Book Value 3.32 3.24 S&P 500 Index Earnings Yield 4.53% 4.79% Dividend Yield 2.07% 2.14% Price/Earnings (12 Mth Trailing] 22.07 20.90 Price/Earnings (2016 EPS Est) 20.53 19.45
BANKING AND CREDIT NEWS-May 7, 2015-Georgia Credit Union fees, earnings yield USD130m in member benefits
Second, the company's EBIT as a proportion of its enterprise value; this is akin to earnings yield adjusted for capital structure.
* Earnings yield. While you're likely to be able to use one or more of the above methods, bear in mind the possibility of resorting to the basic earnings yield (earnings per share / share price) as a suitable surrogate for ke.
Profits as a percentage of the S&P 500's price, known as earnings yield, total 5.6 percent, exceeding the 2.6 percent yield on the 10-year Treasury note, according to data compiled by Bloomberg.
The current earnings yield of the KASB Universe is 10.4%, 2% lower than the 10 year PIB yield of 12.4%.