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Earnings yield |
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Earnings yieldThe 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.Earnings yieldThe earnings of a company are its annual profits after deduction of tax, dividends to preference shareholders and bondholders. They are usually expressed on a per-share basis (e.g. 7p), and the earnings per share (EPS) figure is calculated by dividing total earnings by the average number of shares in issue for the relevant accounting period.e.g. earnings or £2m, with 10m shares in issue would give an EPS of 20pThe earnings yield is the EPS as a percentage of the current market price of the share. So if the EPS was 7p and the current market price is 116p, the earnings yield7 / 116 x 100 = 6.03%Earnings yield is not used as commonly as its reciprocal measure, the P/E ratio. On the same figures, the P/E would be:116 / 7 = 16.6Similar MatchesNormalized earningsNormalized earningsEarnings that have been adjusted in order to take into account the effect of cycles in the economy. Earnings response coefficientEarnings response coefficientA measure of relation of stock returns to earnings surprises around the time of corporate earnings announcements. Fully diluted earnings per sharesFully diluted earnings per sharesEarnings per share expressed as if all outstanding convertible securities and warrants have been exercised. EarningsEarningsThe annual profits of a company after deduction of tax, dividends to preference shareholders and bondholders. Earnings are usually expressed on a per-share basis (e.g. 7p), and the earnings per share (EPS) figure is calculated by dividing total earnings by the average number of shares in issue for the relevant accounting period.E.g. earnings of £2m, with 10m shares in issue would give an EPS of 20pYou may see earnings used in several ways:Reported earnings: the figure in the company's accountsUnderlying earnings: the figure derived from reported earnings by excluding any one-off items (e.g. profit from the sale of land which is not part of the company's normal business)Diluted earnings: earnings after adjustment has been made for shares that may be issued in the future if holders of options, warrants and convertibles choose to exercise their rights. Primary earnings per (common) sharePrimary earnings per (common) shareEarnings available for the payment of dividends to common stockholders divided by the number of common shares outstanding. Further SuggestionsState Earnings Related Pension Schemeband earnings earnings per share Earnings before interest, taxes, depreciation, and amortization (EBITDA) Quality of earnings earnings factor Retained earnings retained earnings earnings cap Earnings retention ratio lower earnings limit price earnings ratio (P/E ratio) net relevant earnings Earnings before interest and, taxes (EBIT) Earnings momentum upper earnings level adjusted earnings Pretax earnings or profits Earnings price ratio price earnings growth factor taxable earnings Earnings before interest, taxes, and depreciation (EBITD) Earnings before interest after taxes (EBIAT) Accounting earnings Earnings before taxes (EBT) |
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