Earnings yield
Earnings Yield
Valuation RatiosThe inverse of the P/E ratio: earnings per share divided by price. It expresses valuation as a percentage return, making stocks directly comparable with bond yields.
Formula
Earnings Yield = EPS / Price = 1 / (P/E)
Why it matters
Comparing the earnings yield of an index with the 10-year G-sec yield is a classic gauge of whether equities are cheap or expensive relative to bonds.
Indian example
Related terms
Learn the concept
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