- Earnings yield
**Earnings yield**is thequotient ofearnings per share divided by theshare price . It is thereciprocal of theP/E ratio —the E/P or the EPS.The earnings yield is quoted as a percentage, allowing an easy comparison to going bond rates.

**Applications**The earnings yield can be used to compare the earnings of a

stock , sector or the whole market against bond yields. Generally, the earnings yields of equities are higher than the yield of risk-freetreasury bonds reflecting the additional risk involved in equity investments. The average P/E ratio for U.S. stocks from 1900 to 2005 is 14,fact|date=October 2007 which equates to an earnings yield of over 7%.The earnings yield is also the cost to a publicly traded company of raising expansion capital through the issuance of stock.

**Other uses**Earnings yield is one of the factors discussed in Joel Greenblatt's "The Little Book That Beats the Market". However, Greenblatt uses an adjusted earnings yield formula to account for the fact that different companies have different debt levels and tax rates.

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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… … Financial and business terms**Earnings Yield**— The earnings per share for the most recent 12 month period divided by the current market price per share. The earnings yield (which is the inverse of the P/E ratio) shows the percentage of each dollar invested in the stock that was earned by the… … Investment dictionary**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 s the Total Twelve Months earnings divided by number of outstanding… … Financial and business terms**earnings yield**— The ratio of the earnings per share of a company to the market price of the share, expressed as a percentage. See also: price–earnings ratio … Accounting dictionary**earnings yield**— /ˈɜnɪŋz jild/ (say erningz yeeld) noun the fraction calculated by dividing a company s earnings per share by its share price, expressed as a percentage … Australian English dictionary**earnings yield**— See yield … Big dictionary of business and management**earnings yield**— / ɜ:nɪŋz ji:ld/ noun the money earned in dividends per share as a percentage of the current market price of the share … Dictionary of banking and finance**earnings yield ratio**— UK US noun [C] FINANCE ► the earnings yield shown as a percentage … Financial and business terms**Bond Equity Earnings Yield Ratio - BEER**— A metric used to evaluate the relationship between bond yields and earnings yields in the stock market. The Bond Equity Earnings Yield Ratio (BEER) has two parts – the top is represented by a benchmark bond yield (such as five or 10 year… … Investment dictionary**yield gap**— ˈyield gap noun [countable] FINANCE the difference between the amounts of interest on two types of bonds: • The yield gap between the three month bill and the 30 year bond widened to 213 basis points from 212. * * * Also known as yield ratio.… … Financial and business terms