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AppleNVIDIABerkshireMetrics guide
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Metrics guide›Size and valuation

Earnings yield

A year of profit as a percent of market cap: P/E turned upside down, so it can sit next to a bond yield.

Worked example · a round-number company

Net income, 12 months$500M÷Market cap$10.0B=Earnings yield5.0%

How to read it

↑Higher is better. More profit for the price. Compare it with the 10-year Treasury yield.

Example Co. 5.0%
Under 3%3% to 7%Over 7%

Under 3% means investors are paying for growth; over 7% is cheap or expects profit to fall.

Keep in mind

  • Negative when the company loses money.

Related

P/E ratioFCF yield