Earnings Yield Calculator

How it is calculated

Earnings yield is earnings per share divided by the share price: yield % = EPS ÷ price × 100. The tool also gives the P/E ratio, P/E = price ÷ EPS, which is simply the reverse (yield = 100 ÷ P/E), and repeats your EPS as a dollar amount.

EPS and price must be in the same currency, and EPS should cover the period you care about, usually the last twelve months or an annual forecast. Price must be above zero, otherwise no result appears. EPS may be negative, in which case the yield is negative. The P/E is only shown when EPS is positive; with zero or negative EPS it appears as a dash, because a ratio is undefined or meaningless there. The yield is not a dividend you receive: it is the profit the company earned per dollar of share price.

Common mistakes

• Treating earnings yield as a dividend yield. It counts all profit, whether or not it is paid out to shareholders.
• Entering the earnings of the whole company instead of earnings per share, or mixing a price in one currency with EPS in another.
• Using a quarter's EPS as if it were annual. A quarterly EPS gives a yield about a quarter of the annual figure.
• Expecting a P/E for a loss-making or zero-earnings stock. With EPS of 0 or below the tool shows a dash for P/E, while the yield is still computed (and is negative for a loss).
• Comparing the yield with a bond rate as if risk were the same. Earnings can fall, while a bond's coupon is fixed.