Valuation Terms
Earnings Yield
Earnings expressed as a percentage of price, often viewed as the inverse of the P/E ratio.
Also called: inverse P/E
What it means
Earnings yield is generally calculated as earnings per share divided by price per share, or company earnings divided by market value. It shows earnings in percentage form rather than as a multiple.
Why it matters
It can help users compare stock earnings power with bond yields or other return benchmarks, though it still depends on earnings quality.