Earnings Yield Ratio

Written by True Tamplin, BSc, CEPF®

Reviewed by Editorial Team

Updated on February 12, 2023

The earnings yield ratio is an effective restatement of the price-earnings ratio. It shows earnings per share as a percentage of the market value of the ordinary share.

Earnings yield is calculated by dividing the earnings per share (EPS) for the last 12 months by the current market value of the share and multiplying the result by 100.


Earnings Yield Ratio Formula


If a company has an earnings per share (EPS) ratio of 2.8 and its shares trade at $56 per share, the earnings yield ratio is (2.8/56) × 100 = 5%.

The earnings yield ratio is 5%. This means that the company's EPS during the last 12 months was 5% of the current market value of its ordinary shares.

Earnings Yield Ratio FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.