Earnings Yield Calculator
Calculate earnings yield from earnings per share and stock price.
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Understand this calculation
Earnings yield expresses earnings per share as a percentage of share price. It is closely related to P/E but presents the relationship in yield form.
Formula
Worked example
$6 EPS divided by a $150 share price produces a 4.0% earnings yield.
How to interpret the result
Earnings yield can help compare valuation on a percentage basis, but accounting earnings are not the same as cash distributed to shareholders.
Assumptions & limitations
Share price must be positive. Negative EPS produces a negative earnings yield and requires caution in interpretation.
Practical context
When this calculator is useful
Earnings yield is useful when you prefer to view earnings relative to price as a percentage rather than as a P/E multiple. Because it is closely related to the inverse of P/E, it can make comparisons with percentage-based measures more intuitive.
How investors commonly use it
Investors may compare earnings yields across profitable companies or use them as one reference point alongside bond yields, free cash flow yields and required returns, while recognizing that the underlying risks are different.
What this metric does not tell you
Earnings yield is based on accounting earnings, not distributable cash. It does not account for leverage, capital expenditure needs, growth quality or the probability that current earnings will persist.