Earnings Yield
Valuation
Definition
The inverse of the P/E ratio, calculated as earnings per share divided by stock price, expressed as a percentage to compare stock returns with bond yields and assess relative value across asset classes.
Key Points
- Inverse of P/E ratio (EPS/Price)
- Higher yield indicates cheaper valuation
- Comparable to bond yields for asset allocation
Examples
Stock with P/E of 10 has 10% earnings yieldEarnings yield above bond yields suggests valueQuick Info
Category
Valuation
Related Topics
pe ratio
dividend yield
valuation metrics
Related Terms
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