Earnings yield
Earnings per share divided by the share price — the inverse of the price to earnings ratio.
Formula
\text{Earnings yield} = \frac{EPS}{\text{Share price}}Stored as a fraction of one. Computed from earnings per share over a trailing year and the current price; with a loss the measure is not calculated.
How to read the number
In this form an equity valuation can be set directly against bond and deposit rates.
When the metric lies
Profit is an accounting quantity while a bond coupon is cash. The comparison works as a bearing, not as a choice between equivalents.
Also known as: inverse p/e